China Decoration Construction (002822) Company Research: Decoration Clipper Enters Blue Ocean of Property Management Worth Looking Forward

China Decoration Construction (002822) Company Research: Decoration Clipper Enters Blue Ocean of Property Management Worth Looking Forward

Decorative strong corporate profits accelerated growth, many orders in hand.

The company’s main business is public fittings. While deepening the South China market, it has established regional marketing centers in South China, East China and North China.

The short-term company vigorously implemented the construction of a public installation management and control system, and its operating efficiency continued to improve. In 2019H1, revenue / profit growth increased by 25% / 40%. At the same time, it continued to strengthen its collections and achieve a significant positive cash flow in operations.

As of the first half of 2019, the company has signed uncompleted orders of 84.

500 million, which is double the revenue in 2018, and there are ample orders in hand to escort the company’s future performance.

The property management industry has entered a golden development period, and the decoration and property management businesses have synergy.

In the context of the transition from an incremental economy to a stock economy, the domestic property management industry is in a fast-growing period. In addition to the rapid expansion of the residential property market by inward and outward expansion, the leading property management industry in Hong Kong has vigorously expanded the non-residential property market.Commercial and public property markets.

There is a natural synergy between the public service and property management industries. Mergers, decoration companies have a better grasp of the overall design and operation and maintenance information of the project than third-party property management agencies, and their property companies undertake the property management business.In the subsequent maintenance and secondary decoration of the project, diversion can be provided for the public service.

The company intends to acquire the holding technology park property and cut into the blue ocean of property management is worth looking forward to.

As early as 2017, the company invested in a 25% stake in SEG Property, and 杭州桑拿 the rest of 2016/2017/2018 / 2019H1 achieved revenue1.




6 million, net profit of 683/1026/2589 / 15.3 million yuan, the current area under management reaches 1 million square meters.

Recently, the company announced plans to issue shares and pay cash to acquire 100% equity of Jiazete (total price of 1.

7.3 billion), the remaining holdings of high-quality property management company science and technology park properties in the park and public construction management field51.

6% shares, promising that the performance of science and technology park properties in 2020-2022 will not be less than 25,500, 28, 31 million yuan.

The science and technology park property has 20 years of high-tech park planning, operation and management experience. It has transportation business capabilities in industrial planning, investment promotion operations, and park business platform building. The objects of property management services and the company’s public customer groups will clearly overlap. In the futureSynergy can be expected.

The future growth of the company has three important points: 1) Public service: Since the beginning of this year, the government has continued to promote the renovation of old communities to bring business increase to the decoration industry.Renewing the company to open up the old market is expected to add momentum to the decoration business.

2) Property management business: Outward mergers and acquisitions are an important channel for rapid expansion of property management companies. Subsequent companies are expected to continue to add weight to the property management sector through mergers and acquisitions.

3) In terms of operating efficiency: The recently completed expansion of the equity incentive plan, with sufficient incentives for core employees, promotes accelerated order conversion, and promotes continuous improvement in operating efficiency.

Investment suggestion: We predict that the company’s profit will be 2 in 2019-2021.



80,000 yuan, the corresponding EPS is 0.



63 yuan (CAGR of 32% in 2018-2021), corresponding to PE is 22/17/14 times.

The company is vigorously exploring the property market while deepening the main business of decoration. The future growth is worth looking forward to.

Considering that the existing company’s decoration main business is growing faster than its peers and the broad prospects of the property market, the current estimated level of property listed companies and the scarcity of A shares, for the first time, give a “buy” rating.

Risk reminder: real estate growth tends to be serious risks, property management business development is less than expected risks, bad debt risk of accounts receivable, etc.