20240325-招银国际-绿城管理控股-09979.HK-FY23_results_in-line___30__NP_and_100__pay-out_8页_1mb

Greentown Management (9979 HK) Report Summary

Key Financial Performance

Greentown Management reported a net profit of RMB 974 million for FY23, representing a 31% year-on-year growth, in-line with forecasts due to effective cost control and a lower effective tax rate of 17%. The dividend payout ratio remained at 100%, offering a special dividend with an 8% dividend yield. Gross profit margin was stable at 52%, though business segments like commercial PJM saw slight declines, while government PJM improved due to operational efficiencies.

Growth Guidance

The company guided for a 20% compound annual growth rate (CAGR) in revenue and 25% CAGR in net profit over the next three years, based on strong target achievement capabilities. This could lead to total revenue of approximately RMB 15 billion and net profit around RMB 1,250 million by 2026. The dividend payout ratio is expected to stay at 80%, maintaining attractive yields.

Business Strategy and Adaptability

Greentown Management demonstrated agility by adjusting its business structure amid a sluggish property market. In FY23, it expanded into non-residential projects, which accounted for 15% of new contracts, and enhanced services to align with policy directives. This adaptability, supported by an asset-light model and high cash flow, helped maintain consistent performance despite market challenges.

Valuation and Analyst Recommendations

The company maintains a "BUY" rating with a target price of HK$9.37 (up 51.3% from current price HK$6.19), reflecting a 13x 2024E price-to-earnings (P/E) ratio. Key valuation metrics include a P/B ratio of 3.0 and ROE of 32.2% in 2024E. Financial highlights show steady revenue growth, with forecasts projecting revenue hikes to RMB 5.609 billion by 2026, and profitability metrics like ROE increasing to 45.0% by 2026E.

Risks

Key risks include potential declines in property sales and defaults by local government financing vehicles, which could impact financial performance.

Analyst Certification and Disclosures

This analysis is based on the BUY rating and important disclosures on the last page, highlighting conflicts of interest and the principle that past performance does not guarantee future results.