中國銀河國際CHINA GALAXY INTERNATIONAL中国物业管理行业2017年5月17日行业稳定增长+并购机会+新收入来源；予绿城服务及彩生活买入评级我们首次覆盖三大中国物业管理公司。我们预计，物业管理公司将得到更多投资者青睐，因物业管理行业为房地产开发商在2017年开始将受到不明朗的政策和经济环境所影响。日趋稳定的物业管理行业的发展机会越来越多，因为多家物业管理公司都持续创新。而020平台等举措将有助节省成本和带来更多商机。宏观层面的利好因素：城镇化持续推进，国民收入继续增长。尽管近期房地产市场有所收紧，但中国的城镇化进程继续推进。伴随着收入的增加，预期与物业相关服务的需求将继续绿城服务2869HK3.404.05买入上升。我们预计在2015年到2020年，该行业的在管总面积的年均复合增长率将达到3.6%，彩生活1778HK4.555.50买入在管总面积在2020年将达到208亿平方米。中海物业2669HK1.441.60持有行业层面的利好因素：行业整合和服务创新。在整体市场不断增长的同时，该行业亦正在整合，行业领导者收购了更多小型企业。现时该行业仍然高度分散，前100大的公司只占市场份额约30%，这带来大量的并购机会。强大的物业管理公司正在变得更强，因为它们在科技的帮助下开发了更多创新和具盈利能力的增值服务。对于龙头企业，增值服务的利润率通常会较高，在某些情况下更贡献超过50%的毛利润。我们预计这一细分市场将继续促进龙头企业的盈利改善。良好的盈利增速；采用轻资产模式。对于我们覆盖的三家行业龙头，我们预计它们的每股盈利在2016-2018年的年均复合增长率达到21%-28%，增速远高于许多“旧经济”行业，因这些“旧经济”行业都受到中国经济逐步增长放缓所影响。估值方面，三只股份的2017年预测市盈率为16-21倍，若考虑到它们每股盈利的快速增长，我们认为这个估值吸引。我们推荐的次序：绿城服务>彩生活>中海物业。目前我们的首选是绿城服务[2869.HK,买入]，因为我们认为其业务将受益于长三角地区的中高端物业服务发展。其创造新的收入来源的能力也优于同业。另外我们预期彩生活(1778.HK,买入)的盈利将在2017年恢复增长。虽然彩生活的每股盈利增长将在2017年和2018年加快，但由于我们对其往绩有一定保留，因此该公司不是我们的首选。至于中海物业[2669.HK,持有]，我们认为投资者应等待更好的切入点，因为公司短期内并无催化剂。行业估值EV/EBITDA20162017E2018E20162017E2018E20162017E2018E(852☑)36986392绿城服务BUY3.4021.5520.9815.933.594.023.2918.0210.037.15彩生活1778HKBUY4.5520.62162013.062.652372.0019.7110.517.80tomyli@chinastock.com.hk中海物业14419.6218.0014.406.093.993.198.586.725.04公司王志文，CFA一研究部主管市增米2016-2018E2017E2018ECAGR(%)20162017E2018E20162017E2018E(852)36986317绿城服务2889HK19.1931.750.8424.8930.8523.3025.501.381.321.65彩生活1778HK30.9324.000.5828.0413.8217.0018.402.282.963.95cmwong@chinastock.com.hk中海物业2689HK16.2825.000.8820.5633.3235.9033.801.632.082.08中國銀河國際CHINA GALAXY INTERNATIONALChina Property Management SectorMay17,2017Stable Sector Growth M&A Opportunities New RevenueSources;BUY Greentown Service and Colour LifeWe are initiating coverage on the three leading China property management companiesProperty Management Sectorwith an optimistic view.We expect property managers to be favoured by more investors,sinceproperty developers will be impacted by increasingly uncertain policies and macroeconomicenvironment from 2017 on.The more stable property management sector offers more growthopportunities,as managers continue to innovate.Initiatives such as the O20 platform could offercost savings and more business opportunities.TPCompanyTickerRating(HKS)(HKS)Macro-side positives:ongoing urbanization and rising incomes.Despite recent tightening inGreentown2869HK3.404.05 BUYthe real estate market,urbanization is an ongoing process in China.Combined with risingServiceincome,demand for property-related services will continue to rise.We expect total managed1778HK4.555.50BUYGFA by the industry to grow at a CAGR of 3.6%p.a.from 2015 to 2020,reaching 20.8bn sq.m.COPL2669HK1.441.60 HOLDSector-side positives:industry consolidation and service innovation.While the overallmarket is growing.the industry is consolidating as many smaller players are acquired by leadingcompanies.The market is still highly fragmented,with the top 100 players commanding onlyabout a 30%market share,which offers a lot of M&A opportunities.Stronger players are alsogetting even stronger as they have developed more innovative and profitable value-addedservices with the help of technology.For the leading companies,value-added services oftenoffer higher margins and in some cases contribute>50%of gross profit.We expect this segmentto continue to drive earnings improvement for the leading companies.Impressive earnings growth with an asset-lite model.For the three key players we cover,weproject their 2016-2018E EPS to grow at a CAGR of 21%-28%,much faster than many "oldeconomy"sectors which are affected by the gradual economic slowdown in China.The currentvaluation of 16-21x 2017E PER still looks attractive on the back of the rapid EPS growth wehighlighted above.Our preference:Greentown Service Colour Life China Overseas Property.Our currenttop pick is Greentown Service [2869.HK,BUY],because we believe its business will benefit fromrising mid-to high-end property services in the Yangtze River Delta.Its capability to generatenew revenue sources is also better than its peers.We also expect Colour Life [1778.HK,BUY]toresume earnings growth in 2017E.Although Colour Life should have faster EPS growth in 2017Eand 2018E,it is not our top pick because of concerns about its execution track record.Webelieve investors should wait for a better entry point for COPL [2669.HK,HOLD]because of alack of near-term catalysts.Tony Li,CFA-AnalystValuation of the sectorCompanyTickerRatingPricePER(x)PBR(x)EV/EBITDA(852)3698639220162017E2018E20162017E2018E20162017E2018EGreentown ServiceBUY3.4021.5520.9815.933.594.023.2918.0210.037.151778HKBUY4.5520.62162013.062.652.372.0019.7110.517.80tomyli@chinastock.com.hk14419.6218.0014.406.093.993.198.586.725.04Wong Chi Man,CFA-Head of ResearchCompanyTickerEPS Growth (%PEG (x)2016-2018EDiv Yleld(%)2017E2018ECAGR(%)20162017E2018E20162017E2018E(852)369863172889HK19.1931.750.8424.8930.8523.3025.501.381.321.65Colour Life Services1778HK30.9324.000.5828.0413.8217.0018.402.282.963.95cmwong@chinastock.com.hkChina Overseas Property 2669 HK16.2825.000.8820.5633.3235.9033.801.632.082.08Sources:Bloomberg,CGIS Research estimates中國銀河國際CHINA GALAXY INTERNATIONALSummary of Our ViewsGreentown Service [BUY;TP:HK$4.05].Greentown Service is a leading proper-ty management company in China,focusing on mid-and high-end residential proper-ties in the Yangtze River Delta.We believe it is the best-positioned listed company inthe market to capture the fast-growing demand in its focus segment.As its core busi-ness and value-added service segment are likely to maintain strong growth,we fore-cast that the Company's EPS will grow at a CAGR of 24.7%from 2016 to 2019E.Weview the Company as the top pick in the sector,and initiate coverage with a BUY rat-ing.Our target price of HK$4.05 is based on 25x 2017E PER.We believe PEG ofabout 1x is not demanding,as the potential upside from M&Asupported by its net cashof >RMB2bn is not included.Colour Life [BUY,TP:HK$5.50].Colour Life,the largest property manager in China interms of GFA managed,has been de-rated by the market for some time,but we be-lieve the de-rating will come to an end soon.While the outcome of its business trans-formation and the potential asset injection of Wanda Property Management have yet tobe seen,we believe the Company is likely to resume higher profit growth of 32%in2017E on the back of steady growth in gross profit and much lower option expensesthis year.We also note that management has been focusing on enhancing sharehold-ers'return.We initiate coverage with a BUY rating and a target price of HK$5.50.based on 20x 2017E PER.China Overseas Property [HOLD,TP:HK$1.60].China Overseas Property HoldingsLimited(COPL)is a property management company under COLI [0688.HK].with ex-tensive projects in mainland China and Hong Kong.With strongproject pipelines from its parent,we expect its net profit to grow at a CAGR of 18.3%between 2016 and 2019E.With net cash of HKS1.8bn at the end of 2016,we also fore-see a significant acquisition by the Company,most likely related to the property man-agement business of CITIC Real Estate.However,the timing and valuation of such atransaction is uncertain,so we prefer to adopt a wait-and-see attitude.Initiate withHOLD,with a target price of HK$1.60(based on 20x 2017E PER).Figure 1:Summary of Three Listed CompaniesGreentown Service [2869.HK]Colour Life [1778.HK]COPL [2669.HK]Key personnel of Greentown China and theMajor ShareholdersCOLl is the controllingGreentown China is also a cornerstoneshareholder with a 72%stake.shareholder with a 61.2%stake.investor with a 5%stakePositioningMid to high-endMore mid-end focused but isMid to high-endexpanding its high-end segmentReporting CurrencyRMBRMBHKDRevenue in 2016RMB 3,722mRMB 1,342mHKD 2,563mNet Profit in 2016RMB 286mRMB 188mHKD 226mGFA Under Management105,200395,12092.500(2016.unit:'000sgmNumber of Communities in 20168092,339470Geographical FocusHangzhou and Yangtze River DeltaEastern and southern ChinaRelatively diversifiedExporting its online platform toLatest Business FocusValue-added services such as educationContinue to strengthen its value-third-party property managementand property agency servicesadded servicescompaniesProgress in 020 PlatformIn relatively early stageMore matured;now exporting tothird-partiesIn relatively early stageSources:CGIS Research淘宝店铺Vian研报”收集整理获取最新报告及后续更新服务请淘宝搜索Vivian研报”中國銀河國際CHINA GALAXY INTERNATIONALCoverage Summary and ComparisonFigure 2a:Summary of Our ForecastColour Life803.16545Net Profit in 2017E (RMB million)410.4272.5232.6GPM in 2017E20.0%25.8%NPM in 2017E8.4%122%92%GFAManaged in 2017E(million sq.m)1352493.9Incremental GFA Acquired in 2017E (million sq.m30.098.813.3Gross Profit per sq.m.(RMB)613Net Profit per sq.m.(RMB)3.040.55218Note":We assume HKDRMB is 0.89FY2013FY2014FY2015FY2016FY2017EFY2018EGreentown Service (in RMB)4.435.516.416.817.067.59Colour Life (in RMB)1.571.511.411.481.631.72COPL (in HKD)7.477.336.356.816.896.92Gross Profit persq.m.Core business onlyFY2013FY2014FY2015FY2016FY2017EFY2018EGreentown Service(in RMB)1.252.112.572.722.782.95Colour Life (in RMB)0.870.930.850.951.071.15COPL (in HKD)6.486.485.245.535.615.64GFAunder Manageme nt (Unit:million sq.m)FY2013FY2014FY2015FY2016FY2017EFY2018EGreentown Service556683105135162Colour Life92205322395494593COPL568394107122Sources:CGIS Research estimatesDifferences in ProfitabilityWe believe investors are mostly concerned about the profitability of the threecompanies.Since the margins can be confusing sometimes because of accountingdifferences(more explained in the following pages),we believe gross profit per sq.m.isone of the parameters to look at.Of the three companies,Greentown Service has the highest gross profit per sq.m.atRMB7.06 in 2017E.This could be explained by its high end positioning,as well as ahigher contribution from value-added services and consultancy services than otherdevelopers.But if we include only property management services,then COPL is moreprofitable in this sense,as ~25%of its revenue comes from Hong Kong,where muchhigher management fee are charged than in mainland China generally.Colour Life's profit per sq.m.is obviously lower than that of its peers,since it targetsmostly the mass segment.We expect it to continue to improve since acquiring a high-end property manager in 2015.3