Abstract

Jinke service(09666) strong insight into the industry and resolute strategy implementation. The company realizes that the key competitive factor in the industry is not resources, but talent. The development of enterprises includes not only the expansion of horizontal scale, but also the expansion of vertical industrial chain. And the company's expansion is steady in its progress, and it is not aggressive in mergers and acquisitions, but seeks better opportunities while forming a stronger team. The increasing efficiency, scale and satisfaction have proved that the company has long-term investment value.

The performance is growing rapidly, and the profitability is further improved.

In the first half of 2021, the company achieved an operating income of 2.586 billion yuan, an increase of 88.8% over the same period last year; a net profit of 530 million yuan, an increase of 80.4% over the same period last year, with a strong growth in performance; and a gross profit margin of 32.5% and a net profit rate of 20.95%, respectively, an increase of 2.8pts and 2.1pts over the end of 2020, and further improved profitability.

The team strengthens quickly and the ability continues to improve.

The company actively introduced and transferred internally and externally. In the first half of 2021, the staff of the investment and development team increased by 45% compared with the same period last year, and the staff of the value-added services team increased by 52%. Han Qiang was appointed CEO, and Wu Jing, Tang Zongfu, Wang Xiaofu and Song Gang were appointed vice presidents. Although the rapid replenishment of talent has greatly increased administrative expenses, it has greatly promoted the building of the company's ability to expand mergers and acquisitions and value-added services. Property management company is a light asset service company, talent introduction and management innovation is fundamental.

With the rapid development of community value-added services, local life services set sail.

In the first half of 2021, the company achieved 652 million yuan in community value-added service income, an increase of 419% over the same period last year, accounting for 25.2% of the total income, which greatly increased 16.0pts compared with the end of 2020 and reached a higher level of the same industry. This not only benefits from the company's good service reputation, but also related to the recovery of the epidemic, the company's formation of a special team and other factors. In the second half of the year, the company plans to build a local life service supply chain, making use of the reuse of personnel, the coordination of the supply chain and the sharing of customers into the field of group meals and social meals. Different from overseas, the lack of companies with more than 2 billion income in the field of group meals in China is a vast blue ocean with synergy with property.

We are actively expanding, and the progress is expected to accelerate in the second half of 2021.

The company is good at third-party extension in history, with a new contract area of 38 million square meters during the reporting period, including 23.5 million square meters in the market and 3.85 million square meters in mergers and acquisitions. Although the scale of M & An is small, M & A cases such as Meishan initially show the company's strong integration ability and high-density regional coordination potential. At present, the company has a reserve area of 270 million square meters, and it is expected that the M & A market will be more rational in the second half of 2021, and the company is expected to achieve more fruitful M & A results.

The efficiency of science and technology has been improved and the profitability has been improved.

The proportion of human costs in the company has dropped from 61% in 2017 to 47% in the first half of 2021, while human efficiency has increased from less than 20, 000 to 43000. We believe that the property management industry has obvious potential to improve efficiency, and the company can rely on the power of technology and management to enhance both satisfaction and profitability. In the first half of 2021, the company's gross profit margin increased by 2.8 percentage points and net profit margin increased by 2.1 percentage points.

Risk factors:

The company does not have enough influence in the market outside the southwest, and there is a risk that the progress of outbound expansion and mergers and acquisitions is not as expected.

Investment advice:

We believe that the company has a strong insight into the industry and the implementation of the strategy is decisive and resolute. The company realizes that the key competitive factor in the industry is not resources, but talent. The development of enterprises includes not only the expansion of horizontal scale, but also the expansion of vertical industrial chain. And the company's expansion is steady in its progress, and it is not aggressive in mergers and acquisitions, but seeks better opportunities while forming a stronger team. We maintain the company's annual EPS forecast of 1.70, 2.84, and 4.61 yuan per share in 2021-22-23, based on 25 times PE in 2022. Maintain the company's target price of 83.53 Hong Kong dollars per share, the current share price of 44.45 Hong Kong dollars, maintain the "buy" investment rating.

This article is selected from the official account of Wechat. "CITICResearch, author: Chen Cong, Zhang Guanguo, Li Zongru; Zhitong Financial Editor: Rousseau