Shimao Services 0873

[winston]

not vested

Aug 26, 2021

A leading PM company in the making

Shimao Services delivered a very strong set of 1H21 results with core net profit up 136%, 25% above our estimate, thanks to 171% revenue growth.

Three of its four businesses segments recorded strong growth in 1H21, especially community VAS whose revenue jumped 234% yoy.

To achieve its goal of becoming a leading PM company by 2023, Shimao aims to grow its managed GFA/revenue at FY20-23F CAGR of 60%/70%.

Reiterate Add, with a lower TP of HK$32.3 to factor in a higher country risk
premium. It remains one of our preferred large-cap names.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... AE47DD183B

[winston]

not vested

Strengthening warchest for M&As

Shimao Serv raised HK$4.8bn through new share placements and issuance of convertible bonds, for upcoming M&As.

Despite 10% potential share dilution, we think Shimao Serv has strengthened its war chest for good M&A deals amid tight credit environment for developers.

The potential acquisitions, if realised, may enable Shimao Serv to achieve its
FY22F GFA growth targets earlier than management expects.

Riterate High Conviction due to attractive valuation (15x FY22F PE vs. 56% FY20-23F EPS CAGR) and post-M&A execution; TP lowered to HK$26.8.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 4CADB70BD7