Strong EPS growth reflected in share price
? CR Mixc’s FY21 core net profit jumped 117% yoy to Rmb1.7bn, 29% above
our full-year forecast. Its dividend payout ratio was maintained at 37%.
? It targets 100m sq m of non-retail GFA expansion from 3P developers and 10
more contracts of 3P-managed malls in FY22F.
? We reiterate our Hold call on its rich valuation with a lower TP of HK$40.7
(0.9x PEG or 31.2x FY22F P/E).
FY21 core net profit up 117% yoy
CR Mixc reported a 117% yoy increase in core net profit in FY21 to Rmb1.7bn vs. our
estimate of Rmb1.3bn. This was driven by 1) revenue growth and GPM improvement in
both commercial and residential property management (PM) services, and 2) Rmb361m
yoy increment in bank interest income from idle cash raised from IPO. Without this
increment, CR Mixc’s core net profit would have been up 82% yoy in FY21. DPS jumped
by 109% yoy in FY21 to Rmb0.276, as it maintained a payout ratio of 37% based on
reported EPS.
Targeting 100m sq m of non-retail GFA expansion in FY22F
Its managed GFA from non-retail properties (e.g. residential, office and public space)
increased 38% yoy to 155m sq m at end-FY21. It targets a 100m sq m increase in
managed GFA from third-party (3P) developers in FY22F and has already secured 72m
sq m of managed GFA after acquiring Yuzhou Property Services and Zhongnan
Services, both of which had planned listings in HK. Meanwhile, we estimate that its
parent CR Land would deliver c.15m sq m p.a. of new GFA for management by CR Mixc.
However, GPM from residential community value-added services (VAS) declined by 4.3%
pts yoy to 27.5%, which looked a little low compared to its peers.
Rich mall pipeline for further expansion
CR Mixc managed a total of 69 shopping malls (53 from CR Land) with a total GFA under
management of 7.4m sq m at end-FY21 and has contracted 79 more in its reserve
pipeline for addition from FY22F onwards. Management targets to expand management
contracts of 3P-owned malls by 10 in FY22F. Besides, 12 new malls which are owned by
CR Land will commence operation in FY22F. These will be a key source of CR Mixc’s
FY22F revenue growth from commercial operational services.
Reiterate Hold on rich valuation
We raise our FY22F/23F EPS by 34%/30% after factoring in recently completed M&A,
higher GPM assumptions and faster management portfolio expansion. We also introduce
FY24F EPS of Rmb1.86. Our FY21-24F EPS CAGR is high at 35%, as we roll over EPS
by one year. Our new TP is lowered to HK$40.7, still based on a 0.9x PEG. Reiterate
Hold; its rich valuation of 31.4x FY22F P/E provides little share price upside. Key
downside risks: slower 3P contract expansion and GPM contraction. More EPS-accretive
M&A is a key upside risk.