Jingu Financial News | Open Source Securities released a research report pointing out that Binjiang Ser (03316) is rooted in Hangzhou and radiates all over the country. Its property services are positioned as high-end and lead the industry in terms of growth rate of managed area, level of property management fees, and profitability. As the company's core main business, property management contributes over 50% to the company's revenue. In 2023, the company achieved property management revenue of 1.55 billion yuan, a year-on-year increase of 29.9%. In terms of the managed scale, the company continues to deepen in Hangzhou and expand in the Yangtze River Delta region. By the end of 2023, the company's managed construction area reached 54.8 million square meters, a year-on-year increase of 30.7%, of which residential accounted for 82% and Hangzhou region accounted for 63.6%. Contracted construction area was 82.2 million square meters, a year-on-year increase of 19.0%, providing support for the company's subsequent performance growth. The sales ranking of the company's affiliated company, Hangzhou Binjiang Real Estate Group, has continued to improve, with its sales market share rising to 1.3% in 2023. The company obtained 33 land parcels and 2 contract projects throughout the year, with land acquisition intensity of 38%, a total land reserve of 13.2 million square meters, and Hangzhou's land reserve accounting for 71%. The reserve of property management scale is abundant.
The bank stated that the company's non-owner value-added services include pre-delivery services, consulting services, and community space services. Revenue in 2023 was 0.581 billion yuan, a year-on-year increase of 7.5%. Due to the overall impact of the real estate development industry, the gross profit margin decreased by 11.9 percentage points to 33.2%. The company's 5S value-added service provides high-quality services for one-stop maintenance of house assets, which is a new profit growth point. In 2023, due to the company's expansion of hard installation business, revenue was 0.678 billion yuan, a year-on-year increase of 172.5%, and the gross profit margin decreased by 16.0 percentage points to 32.3% due to the dilution of the hard installation business.
The bank predicts that the company's net income attributable to the parent from 2024 to 2026 will be 0.583 billion yuan, 0.702 billion yuan, and 0.829 billion yuan, respectively, and the corresponding EPS will be 2.11 yuan, 2.54 yuan, and 3.00 yuan. The current stock price corresponds to a PE ratio of 7.1 times, 5.9 times, and 5.0 times, respectively. We initiate coverage and give a "buy" rating.