中國房地產(chǎn)管理：樂意為你服務

1、ChinaEquitiesREMDStill very much at your serviceChina Property ManagementChinaEquitiesREMDStill very much at your serviceChina Property ManagementMarket consolidation and increasing penetration of property management (PM) value-added services to drivegrowthHistory shows that tough physical market co

2、nditions do not automatically translate into weaker growth of PMcompaniesDowngrade Colour Life from Buy to Hold; prefer A-Living and Greentown Service (both rated Buy)Look beyond stock price volatility. PM stocks were hit by cautious sentiment in the property market in 4Q18 and have rebounded since

3、then. We believe strong growth drivers remain for PM companies and forecast average 35% earnings growth forfull-year 2019e. By contrast, we expect developers to grow 24% versus 2018e.Fundamental drivers remain intact. We see the following growth drivers for2019e:(1) market consolidation driving the

4、market share gains of PM companies; (2) a continued upward penetration rate trend for PM services amid decliningcompletions;(3) a solid pace of growth in value-added services (VAS), supporting expansion and profitability; (4) alleviated concerns about social insurance reform. Our sensitivity analysi

5、s shows that a decline in new gross floor area (GFA) in a tough market would only have a modest impact on revenue and core earnings of PM companies.28 February 2019Albert Tam* AnalystThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:albert.p.h.tam.hk albert.p.h.tam.hk+852 282243

6、95MichelleKwok*Head of Real Estate Research, Asia PacificThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:michellekwok.hk michellekwok.hk+852 2996 6918Raymond Liu*, CFA AnalystThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:raymond.w.m.liu.hk raymond.w.m.

7、liu.hk+852 2996 6743Simon Sin* AssociateThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:simon.k.c.sin.hk simon.k.c.sin.hk+852 2996 6514Max Liang* AssociateThe Hongkong and Shanghai Banking Corporation Limited HYPERLINK mailto:max.liang.hk max.liang.hk+852 2996 6629Yiqin Lu* As

8、sociate ShanghaiWhat has changed? We cut earnings forecasts for companies under ourcoverage by an average of 5% in both 2019e and 2020e. In particular, we lower our gross profit marginandearningsestimatesforColourLife.Weourvaluationtolower our target multiples Colour Life, and Service due to a in ta

9、rget prices by an average of 19%. We downgrade Colour Life to Hold as we believe it will be increasingly challenging for the company to achieve qualityexpansion.Focus on the best players. We continue to prefer A-Living (TP: HKD15.20) and Greentown (TP: HKD9.40), both rated Buy. We believe the former

10、 has solid growth momentum and dual support from Agile (3383 HK, HKD10.26, Hold, TP HKD9.00) and Greenland Holdings (600606 CH, not rated) whereas the latter delivers high PM quality and has high growthvisibility.Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andis not registered/ qualified purs

11、uant to FINRAregulations HYPERLINK /regform.php?id=aTdlZjE6N21kazVgM2A Register now HYPERLINK /regform.php?id=aTdlZjE6N21kazVgM2A Register now HYPERLINK /regform.php?id=aTdlZjE6N21kazVgM2A CompanyStockcode CurrencyCurrent Targetprice priceOld Rating OldNew (downside)Market cap 3M ADTV (USDbn)PE(x) 2

12、017aPE(x) 2018ePE(x) 2019eA-Living3319HKHKD12.5819.9015.20BuyBuy21%2.13.035.819.911.7COPL2669HKHKD2.913.703.50BuyBuy20%24.020.6Colour Life1778HKHKD4.839.604.80BuyHold(1)%10.69.8Greentown Service2869HKHKD7.299.109.40BuyBuy29%2.64.344.634.126.0Source: Bloomberg, HSBC estimates (priced at close of 26 F

13、ebruary 2019)This report replaces the version of the same date and title published earlier, to correct the target price for A-Living mentioned in the fourth paragraph on the front page (should be HKD15.20).Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certific

14、ations in the Disclosure appendix, and with the Disclaimer, which forms part of it.Issuer of report: The Hongkong and Shanghai Banking Corporation LimitedView HSBC Global Researchat: HYPERLINK / Figure 1: Changes to our revenue forecasts (RMBm), 2018-20e 2018e 2019e 2020e OldNewChangey-o-y OldNewCha

15、ngey-o-y OldNewChangeImpliedy-o-y A-Living3,6033,5970%104%6,6946,6810%86%9,1029,1090%36%Colour Life3,2983,4454%112%3,9634,0001%16%4,6604,6981%17%COPL3,5003,7577%12%3,8094,1419%10%4,2494,5377%10%Greentown Service6,9286,666-4%30%9,2848,703-6%31%12,24811,423-7%31%Average2%64%1%36%0%24%Note: Forecasts f

16、or COPL are expressed in HKD Source: Company data, HSBC estimatesFigure 2: Changes to our core profit forecasts (RMBm), 2018-20e 2018e 2019e 2020e OldNewChangey-o-y OldNewChangey-o-y OldNewChangeImpliedy-o-y A-Living7257240%140%1,2641,228-3%70%1,5881,543-3%26%Colour Life468455-3%67%677561-17%23%8446

17、94-18%24%COPL3663999%33%4444645%16%5025356%15%Greentown Service525510-3%31%711669-6%31%942881-6%32%Average1%68%-5%35%-5%24%Note: Forecasts for COPL are expressed in HKD Source: Company data, HSBC estimatesFigure 3: Summary of changes to our target prices and target multiples Rating SharepriceUpside/

18、 Targetprice(HKD) Targetmultiple OldNew(HKD) (downside)OldNewChangeOldNewA-Living3319 HKBuyBuy12.5821%19.9015.20-24%-Colour Life1778 HKBuyHold4.83(1)%9.604.80-50%189COPL2669 HKBuyBuy2.9120%3.703.50-5%3023Greentown Service2869 HKBuyBuy7.2929%9.109.403%3530AveragePriced at 26 February 201817%-19%Sourc

19、e: Company data, Bloomberg, HSBC estimatesFigure 4: Valuation comps summaryCompanyRating PriceUpside/Mkt cap3M ADTVNAV/sh(Disc)/ PE (x) Yield (%)PB (x) Netdebtcode(HKD)(HKD) (dnside) (%) (USDbn)(USDm)(HKD) prem (%)2017a 2018e 2019e2018e2017a2018eA-Living3319 HKBuy12.5815.20212.13.015.2(17)35.819.9 n

20、et cashCOPL2669 HKBuy2.913.50201.22.2NANA31.924.020.61.311.2 net cashColour Life1778 HKHold4.834.80(1)0.81.1NANA3.21.240Greentown Service2869 HKBuy7.299.40292.64.3NANA44.634.126.01.09.1 net cashCG Services6098 HKNR12.80NANA3.617.0NANA68.733.325.50.8NA net cashAverage1739.324.4NMNotes: Priced at clos

21、e of 26 February 2019; NR = not rated; NM = not meaningful; NA = not available Source: Company data, Bloomberg estimates for CG Services, HSBC estimates for othersStock price volatility spills over into PM sectorIt is tempting and understandable to think that if theres a slowdown in the physical pro

22、perty market there will be similar weakness in the property management (PM) sector. The facts dont support this view. Despite the recent higher-than-normal correlation (85% in 2H18) between share prices of property developers and those of PM companies, the two segments operate on different As former

23、 segment of less in 2019, we expect investors to turn more cautious and selective. However, in this report we explain why we believe a decline in new gross floor area (GFA) in a tough market would only have a modest impact on the revenue and core earnings of PM companies. The sectors key drivers rem

24、ain in our and this is why remain on the and recommend keep their faith, particularly in quality.First, the rather gloomy facts: amid rising macro uncertainties in late 2018, growth in national property sales GFA decelerated to 1% y-o-y in December (from 4% y-o-y in July). Stock prices of property d

25、evelopers and PM companies both entered a consolidation period in late 2018 and rebounded subsequently, where PM stocks were down 6% in 4Q18 and up 17% year todate.For the reasons we touch on above and elaborate on below, in spite of this rather pessimistic market environment we are constructive on

26、the quality end of the sector and therefore continue to favour A-Living and Greentown Service, both of which we rate Buy. However, we downgrade Colour Life to Hold (from Buy), trimming our core profit earnings estimates by 3% for 2018e and 17% for 2019e. Our earnings forecasts for Colour Life are 10

27、% below consensus for 2018e and 12% below for 2019e due to our more conservative revenue and gross marginforecasts.Figure 5: Share prices of PM companiesGreentown Service ListingZhong Ao ListingGreentown Service ListingZhong Ao ListingColour Life ListingCOPL ListingA-Living ListingEver Sunshine List

28、ingCG Service Listing12.00-Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18Property developers (LHS)Property management companies (RHS)Date of listingSource: Bloomberg, HSBCCorrelation between developers and managers

29、 has peakedAs we mentioned above, the business model of PM companies is distinctly different from that of developers. Heres why: the former are characterised by their light-asset model and cash-rich nature, which differs from the capital-intensive business model of the latter. The PM companies are t

30、herefore perceived as having greater stability because they have high recurring income.As we stated above, the 85% correlation between the share prices of PM companies and property developers in 2H18 was high, in our view. This was due to the strong broader stock market trend that moved both sectors

31、 in a similar direction. We expect this correlation to revert closer to its mean level of 66% that existed through 1H16-18.The correlation reflects the notion that one of the growth drivers of PM companies is derived from their developers parent or associated developer since they are the source of n

32、ew gross floor area (GFA). Also, the PM sector lacks high frequency data points so investors naturally rely on the more frequent release of real estate sales data (despite the fact that these may in fact not be a good proxy for the PM sector) as a guide to trade the PM sector. In the longer term, we

33、 expect the correlation in share prices of the two segments to trend down further as the PM sectors listing history lengthens.Fundamental drivers remain intactWe remain constructive on the PM sector in 2019e. We believe key growth drivers remain intact for PM companies, and we are forecasting 35% ea

34、rnings growth, on average, among them for the full year 2019e. Key growth drivers include (1) market consolidation and market share gains;(2) an upward trend in the penetration rate of PM services; (3) support from the expansion in value-added services (VAS); and (4) the alleviation of concerns abou

35、t social insurance reform. We discuss these growth drivers later in this report.Based on their high recurring income and solid earnings growth momentum, PM companies are set to record steady financial performance, in our view, even as the physical market becomes more challenging. The PM sector is st

36、ill fragmented: the top-100 companies account for only a 32% share of the market the top share, room for PM companies to grow. This provides a good reason to invest in the sector early on to enjoy longer-term upside from fast growth in the sector.Our forecast of 35% earnings growth for PM companies

37、on average in 2019e contrasts with our estimate of 24% growth for developers. We believe PM stocks would be a good complement for investors with core holdings in large-cap property developers already, as they offer more growth potential and less concentration.How PM companies performed in the last p

38、roperty downcycleWe remain cautious regarding the outlook for the China property market and expect a correction in the physical market in HYPERLINK /R/10/dFG9xZx 2019 Outlook: looks but wait until 11 October 2018). Briefly, we forecast a 10% decline in national transaction volume for the full year,

39、but we expect contracted sales of property developers under our coverage universe to grow c22% versus 2018e.In the 2014 property market correction, PM companies earnings still grew 46% vs 2013 In our view, a property market correction would not significantly hinder the growth of PM companies. China

40、experienced a property downcycle in 2011 and 2014. In 2014, property sales declined8%involumewhilethePMcompaniesstillenjoyed39%revenuegrowthand46%core earnings growth HYPERLINK l _bookmark0 (Figure 6 and HYPERLINK l _bookmark1 Figure 7). In 2015, there was negative growth in completions as developer

41、s scaled back their delivery as a result of the sales slowdown since 2014 HYPERLINK l _bookmark2 (Figure 8 and HYPERLINK l _bookmark3 Figure 9). However, PM companies still enjoyed 44% growth in revenue for that year and 31% growth in core earnings. In our view, the top PM companies are likely to co

42、ntinue their expansion during a physical market correction due to gains in new market share arising from consolidation and the increasing penetration of PM services (see Figures12-14).Given the PM companies relatively short listing history, we do not have data for their financial performance in the

43、2011 cycle.Figure 6: PMs core earnings growth vs national sales volume growthFigure 7: PMs revenue growth vs national sales volume growth2014National sales vol -8%PM earnings +46%46%79%49%83%2014National sales vol -8% PM revenue +39%39%44%23%26%73%20%17%-8%31%7%22%8%17%-8%22%7%8%3%2013 2014 2015 201

44、6 2017 1H18Average core earnings y-o-y Property sales vol y-o-y2013 2014 2015 2016 2017 1H18Average revenue y-o-y Property sales vol y-o-ySource: Company data,NBS,HSBCSource: Company data, NBS,HSBCFigure 8: PMs core earnings growth vs national completion growthFigure 9: PMs revenue growth vs nationa

45、l completion growth80%60%40%2015National completion -7%PM earnings +31%46%31%79%49%83%2015National completion -7%PM revenue +44%39%44%23%26%73%20%20%2%6%6%-7%6%-4% -11%2%-7%6%-4%-11%2013 2014 2015 2016 2017 1H18Average coreearningsy-o-yCompletiony-o-y20132014201520162017 1H18Averagerevenuey-o-yCompl

46、etion y-o-ySource: Company data,NBS,HSBCSource: Company data, NBS,HSBCSensitivity analysis of slowdown in GFAgrowthWe performed two scenario analyses to illustrate the impact of a slowdown in new (revenue- bearing)GFAadditiontothePMcompaniesversusourexistingrevenueandearningsforecasts. Even if new G

47、FA addition were to decline by 20%, according to our analysis there will be only a small impact (on average -2%) on the PM companies 2019-20e core profits. Based on our analysis, A-Livings bottom line should see a relatively greater impact, whereas that of Greentown Service is likely to see the leas

48、timpact.If we assume a 10% decline in new GFA, on average, this would result in a 1.2% and 1.2% decline in revenue and 0.8% and 0.9% decline in core profits of PM companies in 2019e and 2020e, respectively.Figure 10: Assuming a 10% decline in new GFA addition in 2019Impact Revenue Core profit 2019e2

49、020e2019e2020eA-Living-1.5%-2.1%-1.4%-1.8%Colour Life-1.0%-0.9%-0.9%-0.8%COPL-0.9%-0.8%-0.7%-0.7%Greentown Service-1.3%-1.0%-0.3%-0.2%Average-1.2%-1.2%-0.8%-0.9%Source: Company data, HSBC estimatesIf we assume 20% decline in new GFA, on average this would lead to a 2.3% and 2.4% decline in revenue a

50、nd 1.6% and 1.7% decline in core profits of PM companies in 2019e and 2020e, respectively.Figure 11: Assuming a 20% decline in new GFA addition in 2019Impact Revenue Core profit 2019e2020e2019e2020eA-Living-3.0%-4.1%-2.7%-3.7%Colour Life-1.9%-1.7%-1.7%-1.5%COPL-1.8%-1.6%-1.4%-1.3%Greentown Service-2

51、.6%-2.0%-0.5%-0.4%Average-2.3%-2.4%-1.6%-1.7%Source: Company data, HSBC estimatesThe impact of a slowdown in new GFA is perhaps milder than expected. By company, in the event of a 20% decline in new GFA addition, A-Living would suffer a 4% decline in 2020e revenue and 3.7% decline in 2020e core prof

52、it while COPL would suffer only 1.6% decline in 2020e revenue and 1.3% decline in 2020e core profit. A significant decline in new GFA has a proportionately higher impact on its growth versus other slower-growing PM companies.Based on our analysis, Greentown Service has a steady annual growth pace of

53、 c30% in revenue and core profit. A large proportion (63% in 2019e and 65% in in 2020e) of gross profit comes from VAS. Therefore, the impact from a declining new GFA would only impact its traditional PM segment, which accounts for a small proportion of its overall revenue and gross profit. Hence, t

54、he impact on core earnings would be the lowest among its PM peers.Colour Life and COPL would have a moderate impact due to their modest growth rates but relatively small VAS segment.Long-term growth driver remains intactWe maintain our constructive view on the sector. We believe its fundamental and

55、long-term growth driver remains intact. The listed players should continue to benefit from market consolidation, increasing penetration of PM services and expansion in VAS.Market consolidation and market share gains remain the keythemesWe believe the PM companies will gain market share in the near f

56、uture given the very fragmented market landscape compared with that of the developers. At the same time the PM companies under our coverage have been expanding. Their GFA under management is expected to grow by 6-44% in 2019e. Together with the contribution of higher VAS, core earnings are expected

57、to grow at an average 35% in the same year. Based on data from the China Index Academy, total national GFA managed by PM companies increased modestly by 6% in 2016 and 5.5% in 2017. The pace of growth of GFA for the PM companies was higher than the national growth, reflecting the fact that the top P

58、M companies increased their market share and mirrored the market share expansion of property developers in the past few years. We expect this trend to continue.Figure 12: Market share of PM companies on upward trend32.4%28.4%32.4%28.4%29.4%19.5%10.211.1%4.2%4.9%6.2%7.6%13.5%16.3%30%25%20%15%10%5%0%2

59、01220132014201520162017Market share of top 10 property management companiesMarket share of top 100 property management companiesSource: China Index Academy, HSBC estimatesFigure 13: Market share of propertydevelopers45.8%31.1%45.8%31.1%32.1%35.3%24.6%26.2%17.018.712.816.9%13.7%24.2%28.4%50%40%30%20%

60、10%0%55.9%20122013201420152016201711M18Marketshareoftop10propertydevelopersMarket share of top 50 propertydevelopersSource: CRIC, HSBCPenetration rate of PM service is on an uptrend and has plenty of room to grow There are some key trends to note. National housing completions have been on a downtren