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<Research>G Sachs: CN Property Managers See Higher Shr of Recurring Rev. & Div. Payout Ratio; Growth Getting on Track
Recommend 13 Positive 25 Negative 15 |
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Goldman Sachs highlighted in a report that Chinese property management stocks under its coverage delivered surprising results last year, as cash earnings improved over the broker's already-positive forecasts. The share of recurring revenue has been rising, with the estimated share of that in revenue and gross profit improving to 92% and 90% respectively in 2024-26 for the covered companies. Dividend payout ratios have also risen. Except for CHINA OVS PPT (02669.HK), the average dividend payout ratio for SOE property managers lifted from 30% to about 50% last year. Despite the average share price recovery of 8% from year-to-date lows, Goldman remained constructive on the outlook for the property management industry this year and believed that the industry's growth is now on the right track. The broker expected valuations of the industry to rise further from the current low levels to be more in line with its growth prospects. The broker's 12-month P/E-based target prices for mainland property managers implied a 42% and 20% upside for SOEs and POEs respectively, with CAGRs of 15% and 6% for their EPS from 2024 to 2026. The broker remained bullish on SOE property managers given their higher earnings growth visibility and attractive dividend yields. Goldman's ratings and target prices for Chinese property managers are listed below: Stock | Rating | Target Price (HKD) CHINA RES MIXC (01209.HK) | Buy | $35 GREENTOWN SER (02869.HK) | Buy | $3.8 ONEWO (02602.HK) | Buy | $26 POLY PPT SER (06049.HK) | Buy | $37 CHINA OVS PPT (02669.HK) | Buy | $7.1 CG SERVICES (06098.HK) | Neutral | $6.6 S-ENJOY SERVICE (01755.HK) | Neutral | $2.92 POWERLONG CM (09909.HK) | Neutral | $2.9 SUNAC SERVICES (01516.HK) | Neutral | $2.1 SHIMAO SERVICES (00873.HK) | Sell | $0.97 A-LIVING (03319.HK) | Sell | $3.3 JINKE SERVICES (09666.HK) | Sell | $6.7 AAStocks Financial News |
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