Investment Rating - The report gives a "Buy" rating for Xing Sheng Commercial (06668.HK) [3] Core Views - Xing Sheng Commercial has a strong development potential in the Greater Bay Area, supported by its strategic layout and solid backing from its parent company, Xinghe Holdings [3][12] - The company is focused on optimizing its business structure, with a stable revenue growth forecast and a commitment to high dividend payouts to investors [3][31] - The company has a robust operational strength with three main business models contributing to its revenue [3][39] Summary by Sections 1. Company Overview - Xing Sheng Commercial has established a strategic presence in the Greater Bay Area, with 33 out of 54 projects located there, representing 61.1% of its total projects [3][19] - The company has a total contracted area of approximately 2.77 million square meters, with 1.77 million square meters already opened [3][14] 2. Business Model and Revenue Structure - The company operates under three main business models: entrusted management, brand and management output, and whole rental services [3][39] - As of H1 2024, the revenue from entrusted management services was 210 million RMB, showing a year-on-year growth of 10.5% [2] - The gross profit margins for entrusted management, brand output, and whole rental services were 57.9%, 75.2%, and 12.7% respectively, maintaining stability compared to the previous year [2] 3. Financial Performance - In 2023, the company reported a revenue of 635 million RMB, a 13.0% increase year-on-year, with a gross margin of 52.5% [3][5] - The net profit attributable to shareholders for 2023 was 171 million RMB, with a projected net profit of 150 million RMB for 2024 [5] - The company has maintained a high dividend payout ratio, with a dividend of 0.12 RMB per share in 2023, reflecting a 12.2% increase [3][31] 4. Future Outlook - The company expects to achieve net profits of 1.50 billion RMB, 1.55 billion RMB, and 1.59 billion RMB for the years 2024 to 2026, with corresponding PE ratios of 8, 7, and 7 [3][5] - The strategic focus will continue to be on the Greater Bay Area, with plans for further expansion and optimization of project structures [3][19]
星盛商业：扎根大湾持续优化结构，稳中向好剑指行业龙头-20250304