not vested
COUNTRY GARDEN SERVICES (6098 HK)
Recommendation : BUY
Fair Value : HKD 64.03
SCALE MATTERS.
Share price retreated 43% from peak
M&A activities should reduce concentration risks with Country Garden Holdings
Lower fair value estimate of HKD64.03
Country Garden Services Holdings (CGS; stock code: 6098 HK) is a market leader in the property management services sector with a sizeable total contracted GFA of 1,120m sqm (as at 30 Jun 2021, including GFA from Justbon Services which it acquired).
We believe CGS is able to benefit from significant economies of scale and strong brand equity. CGS also has the ability to offer a diverse range of value-added services to its customers, and has shown its ability to grow its scale and GFA under management via mergers and acquisitions.
Management has set an ambitious top-line target over the medium term, with an aim to achieve over RMB100b in revenue in 2025, which would represent a CAGR of ~50% from FY20’s RMB15.6b revenue base.
Source: OCBC