20220708-招银国际-华润万象生活-01209.HK-1H22E_preview__still_20__growth_after_rental_relief_4页_869kb

CR Mixc Lifestyle (1209 HK) Summary

Core Content Overview

This document is an equity research update on CR Mixc Lifestyle (1209 HK), focusing on its financial performance and outlook for 1H22E and beyond. It highlights the company's growth prospects, key financial metrics, and valuation analysis, while also addressing potential risks.

Key Financial Outlook for 1H22E

• Revenue and Net Profit Growth: The company is expected to report a 30% YoY revenue growth and 20% YoY net profit growth in 1H22E.
• Segment Performance:
  • Residential Segment: Driven by M&A activity, this segment is projected to grow by 43% YoY, with basic management revenue increasing by 57% to RMB2.7bn.
  • Shopping Mall Segment: Slightly impacted by rental relief, expected to grow by 7% YoY. Gross profit margin is estimated at 66%, with gross profit reaching RMB659mn.
  • Office Segment: Expected to grow by 15% YoY, with a gross profit margin of 33.0%.
• Gross Profit Margin: Overall gross profit margin is estimated to be 29.8%, down by 2ppt YoY due to mix changes.
• Net Profit Margin: Expected to remain at 18.6%, slightly lower than the previous year.
• Valuation: Current stock price is trading at 35x 2022E PE, close to the 1-standard deviation below the historical average. The adjusted target PE multiple is 40x 2022E, implying a target price of HK$44.30, which is +15.3% above the current price of HK$38.45.

Full-Year Earnings Forecast (2021-2024E)

• Earnings CAGR: The company is expected to achieve a 24% CAGR in earnings from 2021 to 2024.
• Normalization: Earnings are expected to take off in 2023E with a 26% YoY growth.

Valuation and Market Position

• PE Multiple: The current PE multiple is 35x 2022E, while the adjusted target is 40x 2022E.
• Target Price: HK$44.30, a +15.3% increase from the current price.
• Market Cap: As of the latest data, the market cap is HK$87,762 million.
• Shareholding Structure:
  • CR Land & CR Holdings: 73.7%
  • Free Float: 26.3%

Key Ratios

Risks and Considerations

• Pandemic Impact: Continued challenges in Shenzhen and potential accounting receivable issues post-M&A.
• Retail Recovery: Uncertainty around the retail recovery trend could affect the performance of the shopping mall segment.
• Valuation: The 20% net profit growth may not be sufficient to justify a further rally given current valuations.

Analyst Recommendation

• Rating: BUY (Maintain)
• Target Price: HK$44.30
• Previous Target Price: HK$56.00

Conclusion

CR Mixc Lifestyle is projected to maintain strong revenue and net profit growth in 1H22E, primarily driven by the residential segment through M&A. The shopping mall segment is expected to benefit from improved consumption and mall openings in the second half of 2022. Despite the growth, the current valuation may not support further significant gains, and investors are advised to wait for clearer signs of retail recovery. The company's financial health remains robust, with a stable cash flow and a declining debt-to-equity ratio. However, risks related to the pandemic and potential receivable issues should be considered.