Investment Rating - The report does not provide a specific investment rating for the company [2]. Core Insights - The company, Xing Sheng Commercial, is a leading commercial management company in the Greater Bay Area, focusing on enhancing the value of commercial properties through professional management and long-term contracts with property owners [3][5]. - As of June 2024, the company holds cash reserves of RMB 1.466 billion with no bank loans, indicating a strong liquidity position relative to its market capitalization of HKD 1.228 billion [3][5]. - The company has a high dividend yield of 11%, reflecting its commitment to returning capital to shareholders [5]. - The company operates 29 projects, with 19 located in the Greater Bay Area, and has a stable average occupancy rate of 92.5% [5]. - The company’s revenue model includes service fees from property owners and additional profit sharing, leading to high visibility in earnings and stable cash flow [5]. Financial Performance - The company reported revenues of RMB 635 million for 2023, with a year-on-year growth of 13% [6][10]. - The net profit attributable to the parent company for 2023 was RMB 171.1 million, reflecting an increase of 10.9% compared to the previous year [6][22]. - The company maintains a high dividend payout ratio, with 70% for the full year of 2023 and 50% for the first half of the year [5][22]. - The projected P/E ratios for 2024 and 2025 are 7.5 and 6.3, respectively, which are approximately 50% lower than the industry average [5]. Business Model and Strategy - Xing Sheng Commercial operates under a light-asset model, focusing on property management without owning or developing properties, which reduces capital expenditure [5]. - The company has established a strong relationship with Xinghe Holdings, a top 100 real estate company in China, which provides a stable business foundation for future growth [5]. - The company’s service offerings include entrusted management, brand and management output services, and full rental services, catering to various client needs [6]. Market Position - The company is positioned as a rare pure commercial service player in the Hong Kong stock market, enhancing its investment appeal due to its scarcity [5]. - The flagship brand, COCO Park, targets consumers aged 15-50 and has successfully attracted a significant number of Hong Kong visitors, accounting for about 50% of weekend foot traffic [5].
星盛商业：公司交流纪要-20250304