China Merchants Shekou (001979) Commentary on Major Issues: Central Enterprise Reform Goes Further to Focus on Promoting a Win-Win Situation

China Merchants Shekou (001979) Commentary on Major Issues: Central Enterprise Reform Goes Further to Focus on Promoting a Win-Win Situation

The company actively participates in the integration of state-owned enterprises, and cooperates with the strong and strong to take the lead in supporting the development of asset-light platforms.

We expect that in the future, China Merchants Property is expected to rank among the leading property management companies in China, and the company will also benefit from its long-term ownership of the property 武汉夜生活网 management platform.

The company announced plans to acquire the equity of AVIC Sunda and subscribed for the non-public offering of AVIC Sunda with 100% equity of China Merchants Property.

The company announced that it is preparing a cash payment agreement for the transfer of AVIC Sunda 22 held by AVIC International Holdings (the single largest shareholder of AVIC Sunda).

35% equity.

China Merchants Property has a very small proportion of the company’s business, and its operating connotation and real estate development are very different.

China Merchants Property’s official website disclosed that the company’s total assets at the end of 201816.

9.8 billion yuan, with a total income of 29.

200 million, accounting for 0 of listed companies.

40% and 3.

31%.

Property management is not a resource-based industry. 杭州桑拿网 Its development depends on high-quality service, excellent diversified business capabilities, the application of new technological achievements, and the continuous building of a brand. It is completely different from the real estate development business.

The property management industry is moving towards independence, and the industry leaders have extremely broad development space.

With a large number of property management companies landing on the capital market (Zhonghai Property, Greentown Services, Country Garden Services, Yongsheng Life Services, etc.), the property management industry is no longer a dependency of the development industry, and its operational independence has been greatly enhanced.

More independent assessment incentives will help promote more influential brand growth and more sustainable profitable growth.

The top property management company can expand assets by light assets (by undertaking manganese development projects or taking over the commission of the industry committee), obtain market-oriented management area, and can use the application of new technology to appropriately increase the per capita management area and unit area charging level.Develop value-added services for owners and non-owners and increase sources of business income. The development space is extremely broad.

With the strong integration of state-owned enterprises, China Merchants Property is expected to rank among the first-tier domestic property management companies.

AVIC Sunda revealed that by the end of 2018, the company’s area under management was 53.07 million square meters.

China Merchants Property disclosed that the company currently manages more than 75 million square meters of projects.

If we simply add up, the company’s operating scale is already close to that of the first-tier companies in the property management sector of Hong Kong stocks (currently, China Overseas Property Management Co., Ltd. has a management area of 1).

4.1 billion square meters, Greentown serves in the area1.

700,000 square meters).

Moreover, China Merchants Property also has significant advantages over itself, including strong support from leading development companies, increased certainty in management area, and experience in operating and managing a variety of industry forms (especially long-serving corporate institutions, science and technology innovationParks, urban public construction, etc.), high owner satisfaction and high-end brand image, higher market density in parts of cities such as Shenzhen, and the consequent possibility of developing a diversified life service business.

Of course, AVIC’s experience in third-party expansion and technology application will also help the future development and growth of the property management platform.

In general, we believe that after CCTV’s strong alliance, the new property management platform is expected to become a leader in the listed property management industry with very scarce stocks.

The company can share the dividends of the growth of the asset-light service platform by holding the property rights of the property management platform.

Risk factors: The company’s cash purchase of shares and subscription of shares still remain uncertain.

Centralized enterprises integration, separation of priorities, optimistic about the medium and long-term investment value of China Merchants Shekou: In the short term, we believe that China Merchants Property has a very low percentage of listed companies, and the consideration paid for the cash purchase of equity is relatively low compared to the company’s total assets. Therefore, weDoes not adjust the company’s profit forecast, NAV calculation results and target prices.

However, in the medium and long term, the company actively participates in the integration of state-owned enterprises and joins forces to support the development and expansion of asset-light platforms. It is expected that China Merchants Property will rank among the leading Chinese property management companies in the future.And long-term benefits.
We maintain our EPS forecast for 2019/2020/20202.

56/3.

11/3.

75 yuan / share, NAV38.

66 / share, giving the company a 25% discount on NAV and 12 times PE in 2019, taking the average to maintain the company 29.

The target price of 87 yuan / share, maintain the investment rating of “Buy”.