Summary of Greentown Service (2869.HK) Conference Call Company Overview - Company: Greentown Service (GTS) - Ticker: 2869.HK - Industry: Property Management Services (PMS) Key Financial Highlights - 1H25 Core Operating Profit: Increased by 25% year-on-year (yoy), exceeding management's guidance of 15% yoy and Goldman Sachs' estimate of 17% yoy [1][3] - Gross Profit Margin (GPM): Improved by 0.5 percentage points (pp) yoy, with all sub-segments showing yoy GPM increases [1] - PMS Revenue: Grew by 10% yoy, contributing 71% to total revenue, marking a return to record levels since 2016 [1][3] - Accounts Receivable (AR): Expanded by 14% yoy, with management optimizing AR structure to maintain a healthy balance [1][9] - Cash Reserves: Increased by 26% yoy, totaling over Rmb1.1 billion net addition [1][8] Management Guidance and Future Outlook - FY25 Guidance: Maintained core operating profit growth target of 15% yoy, supported by double-digit PMS revenue growth and further margin improvements [3][4] - Long-term Margin Outlook: Management aims for continued GPM improvement and SG&A ratio optimization through 2026-2027 [3][4] - Project Engagement: Focused on high-profitability projects in core cities, with a target of Rmb4 billion in new contracts for FY25 [4] Operational Insights - Project Sourcing: 95% of new projects located in core cities, with significant contributions from large state-owned enterprises (SOEs) [4][7] - Community Living Services: Efforts to enhance revenue generation through community services, early childhood education, and elderly care [4] - Organizational Streamlining: Continued efforts to reduce SG&A expenses, which decreased to 7.9% of total revenue [1][7] Risks and Challenges - Community VAS Revenue: Experienced a decline of 6% yoy, primarily due to a significant drop in home living services [9] - AR Impairment Loss: Increased by 34% yoy, indicating potential collection challenges [9] - Market Competition: Facing intensified competition in the property management sector, which may impact margins [4][15] Investment Thesis - Rating: Buy - 12-Month Target Price: Revised to HK$6.3 from HK$5.0, based on a 12X 2027E free cash flow valuation [6][15] - Valuation Comparison: GTS trades at a lower P/E ratio compared to peers, with a projected 25% EPS CAGR and a 6% yield [6] Conclusion - Greentown Service is positioned for continued growth and profitability, supported by strong project engagement and effective cost management strategies. However, potential risks related to revenue declines in certain segments and market competition should be monitored closely.
绿城服务-2025 年上半年核心利润超出预期；进入盈利能力改善新阶段；买入评级