Investment Rating - Buy (Maintained) [2] Core Views - The company's revenue for the first half of 2024 reached RMB 19.60 billion, a year-on-year increase of 29.7%, slightly exceeding expectations [3] - Net profit attributable to the parent company was RMB 2.78 billion, up 12.1% year-on-year, in line with expectations [3] - The company's community value-added services revenue grew significantly, reaching RMB 6.45 billion, a year-on-year increase of 61.2%, with home improvement business revenue surging 207.0% to RMB 2.45 billion [3] - The company's gross margin declined by 2.2 percentage points to 25.9%, mainly due to lower gross margins in property management services, non-owner value-added services, and community value-added services [3] - The company's contracted area reached 88.81 million square meters, up 6.4% from the end of 2023, with 65% of new contracted areas coming from third parties [3] - The company's cash and cash equivalents totaled RMB 4.87 billion, 1.17 times its market capitalization as of August 20, 2024 [3] - The company initiated a share repurchase plan and maintained a 50% interim dividend payout ratio, enhancing shareholder returns [3] Financial Performance - Revenue for 2024H1: RMB 19.60 billion (+29.7% YoY) [3] - Net profit attributable to the parent company for 2024H1: RMB 2.78 billion (+12.1% YoY) [3] - Gross margin for 2024H1: 25.9% (-2.2 pct YoY) [3] - Contracted area as of June 2024: 88.81 million square meters (+6.4% from end of 2023) [3] - Cash and cash equivalents as of June 2024: RMB 4.87 billion [3] Business Analysis - Community value-added services revenue: RMB 6.45 billion (+61.2% YoY), with home improvement business revenue at RMB 2.45 billion (+207.0% YoY) [3] - Property management services gross margin: 15.4% (-0.6 pct YoY) [3] - Non-owner value-added services gross margin: 28.7% (-3.8 pct YoY) [3] - Community value-added services gross margin: 30.5% (-5.0 pct YoY) [3] - New contracted area in 2024H1: 9.26 million square meters (+12.1% YoY), with 65% from third parties [3] Valuation and Forecast - 2024-2026 net profit forecast: RMB 5.6 billion, RMB 6.4 billion, and RMB 7.2 billion, with year-on-year growth rates of 14.6%, 13.8%, and 12.7%, respectively [4] - 2024-2026 PE ratios: 7.46x, 6.56x, and 5.82x [4] - 2024-2026 revenue forecast: RMB 40.47 billion, RMB 49.29 billion, and RMB 57.66 billion, with year-on-year growth rates of 25.53%, 21.80%, and 16.99%, respectively [5] - 2024-2026 ROE forecast: 15.02%, 15.78%, and 16.37% [5] Shareholder Returns - Interim dividend per share: HKD 0.10, implying a full-year dividend yield of nearly 7% based on the closing price of HKD 2.99 on August 20, 2024 [3] - Share repurchase plan: Up to 30.44 million shares, representing 2% of the total shares before the repurchase [3] - Actual repurchase as of August 20, 2024: 2.93 million shares, representing 0.19% of the total shares before the repurchase [3]
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