Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Greentown Service Group / Equity Bottom-Up

<ul>
<li>As China's property market melts down, shares of property management companies are following suit.</li>
<li>And there are increasing governance issues attached to these management units as a slew of questionable parent/subsidiary transactions unfold. </li>
<li>Valuations for property management companies are trading at multi-year lows. That trend is likely to continue.</li>
</ul>


As China's property market melts down, shares of property management companies are following suit.
And there are increasing governance issues attached to these management units as a slew of questionable parent/subsidiary transactions unfold. 
Valuations for property management companies are trading at multi-year lows. That trend is likely to continue.


China Property Management: Lacking Independence

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Greentown Service’s core operating profit/revenue both went up 20% YoY in 1H23, in-line with the market expectation.</li><li>GP margin declined 0.6 ppts to 18.7% but hedged by improving SG&amp;A fee rate (-0.6 ppts to 10.0%).</li><li>We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service’s core operating profit/revenue both went up 20% YoY in 1H23, in-line with the market expectation.GP margin declined 0.6 ppts to 18.7% but hedged by improving SG&amp;A fee rate (-0.6 ppts to 10.0%).We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) – 1H23 Results In-Line, Visible Recovery in Owner VAS

<ul><li>Greentown Service held a reverse roadshow to analysts recently and shared its progress on FY23 target which we think is slower than expected with regard to core operating profit that estimated to grow at &lt;=20% level in 1H23 and imposed certain pressure in 2H23 to catch up FY23 target of 20-25% YoY growth.</li><li>It is also worth noting that the Company achieved a YoY decrease in administration expense, and operating cash flow is likely to reach a breakeven in 1H23.</li><li>We think the Company still has a chance to complete its full year target if the economy recovers faster than 1H23, and the Company can benefit from its fee collection and VAS business.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service held a reverse roadshow to analysts recently and shared its progress on FY23 target which we think is slower than expected with regard to core operating profit that estimated to grow at &lt;=20% level in 1H23 and imposed certain pressure in 2H23 to catch up FY23 target of 20-25% YoY growth.It is also worth noting that the Company achieved a YoY decrease in administration expense, and operating cash flow is likely to reach a breakeven in 1H23.We think the Company still has a chance to complete its full year target if the economy recovers faster than 1H23, and the Company can benefit from its fee collection and VAS business.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) – Differentiation Leads to Long-Term Value

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>Having first introduced the three red line guidance in late 2020, the government has begun shifting its stance, and relaxing some of its regulatory oversight.</li>
<li>In this note, we looked at recent news developments and how some larger developers fared against the three red lines criterion.</li>
<li>Of the large developers we looked at, there are a few names which stand out which could potentially do a capital raising given their financial standing. </li>
</ul>


Having first introduced the three red line guidance in late 2020, the government has begun shifting its stance, and relaxing some of its regulatory oversight.
In this note, we looked at recent news developments and how some larger developers fared against the three red lines criterion.
Of the large developers we looked at, there are a few names which stand out which could potentially do a capital raising given their financial standing. 


Chinese Developers’ Overview - Shift in Sentiment but a Few Still Needs Some Equity

<ul><li>In line with profit alert, Greentown Service reported still strong top line growth at 18% YoY in FY22, thanks to its cooperation with Cinda Yue Life and strong thirdparty expansion.</li><li>However, the GPM has been impacted due to COVID and mix shift, thus dragging down core EBIT to -9% and NP -35% YoY.</li><li>We expect the company to gradually recover in 2023 with 15% YoY NP growth because 1) its high brand quality would accelerate in the expansion of existing home market (30% of overall GFA expansion) during post-period era.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In line with profit alert, Greentown Service reported still strong top line growth at 18% YoY in FY22, thanks to its cooperation with Cinda Yue Life and strong thirdparty expansion.However, the GPM has been impacted due to COVID and mix shift, thus dragging down core EBIT to -9% and NP -35% YoY.We expect the company to gradually recover in 2023 with 15% YoY NP growth because 1) its high brand quality would accelerate in the expansion of existing home market (30% of overall GFA expansion) during post-period era.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Greentown Service (2869 HK) – High brand quality to boost its 2023 recovery

China

Greentown Service Group Co. Ltd. is a property management service provider. The Company provides property management services for high-end residential property, property consulting services, and community value-added services.

Greentown Service Group (2869 HK)

China Property Management: Lacking Independence

Property management units are unlikely to be shielded from risks as their parent face funding issues. Valuations for property management companies...

David Blennerhassett

Greentown Service (2869 HK) – 1H23 Results In-Line, Visible Recovery in Owner VAS

We saw visible recovery on home living services, housing brokerage and education services which will be proved to be a good VAS exploration in our...

CMB International

Greentown Service (2869 HK) – Differentiation Leads to Long-Term Value

We think the Company still has a chance to complete its full year target if the economy recovers faster than 1H23, and the Company can benefit from...

CMB International

Chinese Developers’ Overview - Shift in Sentiment but a Few Still Needs Some Equity

Country Garden Holdings just launched a primary placement to raise US$300m, at a fixed 17.7% discount to last close. Proceeds will be used to repay...

Clarence Chu

Greentown Service (2869 HK) – High brand quality to boost its 2023 recovery

In line with profit alert, Greentown Service reported still strong top line growth at 18% YoY in FY22, thanks to its cooperation with Cinda Yue...

CMB International