Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> is a direct beneficiary of the favorable policies published by The Ministry of Housing and Urban-Rural Development (MOHURD). In his insight, <a href="https://www.smartkarma.com/insights/china-property-management-services-green-light-to-grow" target="_blank" data-smartkarma-citation="insights:46805" rel="noopener">China Property Management Services - Green-Light to Grow</a>, <a href="https://www.smartkarma.com/profiles/zhen-zhou-toh" target="_blank" data-smartkarma-citation="accounts:673" rel="noopener">Zhen Zhou Toh</a> detailed the policies that will benefit the property management service companies.</p>
<p><a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> has corrected 40% from its peak of 13.30 HKD/share and has underperformed the MSCI index since September 2020, despite executing well and raising guidance that its earnings will grow 73% CAGR from 2019-2022e. ( Vs. previous guidance of 69%).  Based on its guidance, the stock trades at 16x FY21 and 11x FY22 ( and PEG of 0.2x).</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/181/612/original/image_25054916241610186672083.png?1610186676" class="editor-image img-responsive" data-smartkarma-image-id="181612"></figure>
<p><em>Source: Bloomberg, Share price in HKD</em></p>
<p>With tailwinds on policy, we see an easy path for the company to recover to its highs of 13.30 HKD/share. </p>

Times Neighborhood (9928 HK) is a direct beneficiary of the favorable policies published by The Ministry of Housing and Urban-Rural Development (MOHURD). In his insight, China Property Management Services - Green-Light to Grow, Zhen Zhou Toh detailed the policies that will benefit the property management service companies.
Times Neighborhood (9928 HK) has corrected 40% from its peak of 13.30 HKD/share and has underperformed the MSCI index since September 2020, despite executing well and raising guidance that its earnings will grow 73% CAGR from 2019-2022e. ( Vs. previous guidance of 69%).  Based on its guidance, the stock trades at 16x FY21 and 11x FY22 ( and PEG of 0.2x).

Source: Bloomberg, Share price in HKD
With tailwinds on policy, we see an easy path for the company to recover to its highs of 13.30 HKD/share. 

Times Neighborhood: Beneficiary of Policy

APAC IPOs & Placements

Zhen Zhou, Toh

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.

Equity Capital Markets

Sino-Ocean Service / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/sino-ocean-service" target="_blank" data-smartkarma-citation="entities:31037:1" rel="noopener">Sino-Ocean Service (6677 HK)</a> is looking to raise US$256m in its upcoming Hong Kong IPO.</p><p>Sino-Ocean Services (SOS) is the property management arm of Sino-Ocean Group. The company focuses on managing properties in first and second-tier cities in China.</p><p>Valuation isn’t exactly compelling considering SOS didn’t really stand out among peers as per our previous note.  Revenue growth has been decelerating, gross margin was mostly stagnant between FY2017 to FY2019 before expanding in 1H FY2020. Reserved GFA also indicates a short growth runway. The company, at best, is fairly valued at the low-end.</p><p>In this note, we will look at deal dynamics, assumptions, and share our thoughts on valuation.</p><p>Our previous coverage of the IPO:</p><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/sino-ocean-services-pre-ipo-nothing-stands-out" target="_blank" data-smartkarma-citation="insights:45646" rel="noopener">Sino-Ocean Services (远洋服务) Pre-IPO - Nothing Stands Out</a> </p></li></ul>

Sino-Ocean Service (6677 HK) is looking to raise US$256m in its upcoming Hong Kong IPO.Sino-Ocean Services (SOS) is the property management arm of Sino-Ocean Group. The company focuses on managing properties in first and second-tier cities in China.Valuation isn’t exactly compelling considering SOS didn’t really stand out among peers as per our previous note.  Revenue growth has been decelerating, gross margin was mostly stagnant between FY2017 to FY2019 before expanding in 1H FY2020. Reserved GFA also indicates a short growth runway. The company, at best, is fairly valued at the low-end.In this note, we will look at deal dynamics, assumptions, and share our thoughts on valuation.Our previous coverage of the IPO:Sino-Ocean Services (远洋服务) Pre-IPO - Nothing Stands Out 

Sino-Ocean Services (远洋服务) IPO - Fairly Valued, at Best

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

China Resources Mixc Lifestyle / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a>/CR Mixc is a Chinese property management and commercial operational service provider. CR Mixc was the fifth-largest Chinese property management companies as measured by property management service revenue in 2019, according to Frost &amp; Sullivan. The controlling shareholder is <a href="https://www.smartkarma.com/entities/china-resources-land-ltd" target="_blank" data-smartkarma-citation="entities:418:1" rel="noopener">China Resources Land (1109 HK)</a>. </p></div><div><p>At the proposed IPO price range of HK$18.60-22.30 per share, CR Mixc will have a market cap of HK$40,920-49,060 million ($5.3-6.3 billion). At the mid-point of the IPO price range, the total proceeds are HK$11,004.7 million ($1.4 billion). </p></div><div><p>Seven cornerstone investors will subscribe for $650 million worth of the offer shares (44.8% of the offer shares at the IPO mid-point). The cornerstone investors are GIC, Hillhouse Capital, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>,  Cephei Capital, Matthews Funds, China Structural Reform Fund and GLP. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/china-resources-mixc-lifestyle-ipo-initiation-the-paradox-of-plenty" target="_blank" data-smartkarma-citation="insights:45244" rel="noopener">China Resources Mixc Lifestyle IPO Initiation: The Paradox of Plenty</a>, we stated that CR Mixc’s fundamentals are mixed, in our view. We label this insight bearish as our valuation analysis suggests that we would participate at most at the low-end of the IPO price range. </p></div></div></div>

China Resources Mixc Lifestyle Services (1209 HK)/CR Mixc is a Chinese property management and commercial operational service provider. CR Mixc was the fifth-largest Chinese property management companies as measured by property management service revenue in 2019, according to Frost &amp; Sullivan. The controlling shareholder is China Resources Land (1109 HK). At the proposed IPO price range of HK$18.60-22.30 per share, CR Mixc will have a market cap of HK$40,920-49,060 million ($5.3-6.3 billion). At the mid-point of the IPO price range, the total proceeds are HK$11,004.7 million ($1.4 billion). Seven cornerstone investors will subscribe for $650 million worth of the offer shares (44.8% of the offer shares at the IPO mid-point). The cornerstone investors are GIC, Hillhouse Capital, Ping An Insurance (H) (2318 HK),  Cephei Capital, Matthews Funds, China Structural Reform Fund and GLP. In China Resources Mixc Lifestyle IPO Initiation: The Paradox of Plenty, we stated that CR Mixc’s fundamentals are mixed, in our view. We label this insight bearish as our valuation analysis suggests that we would participate at most at the low-end of the IPO price range. 

China Resources Mixc Lifestyle IPO: Valuation Insights

Jinke Smart Services / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/jinke-property-group-co-ltd" target="_blank" data-smartkarma-citation="entities:13291:1" rel="noopener">Jinke Property Group (000656 CH)</a>. At the proposed IPO price range of HK$41.80-47.60 per share, Jinke will have a market cap of HK$26,455.7-30,126.6 million ($3.4-3.9 billion). At the mid-point of the IPO price range, Jinke will raise net proceeds of HK$5,738.1 million ($740 million). Ten cornerstone investors will subscribe for HK$2,673.7 million ($345 million) worth of the offer shares. The cornerstone investors include Taikang Life, Hillhouse Capital, Snow Lake Capital, CICC Capital, UBS Asset Management and Marshall Wace. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jinke-smart-services-ipo-initiation-street-smart" target="_blank" rel="noopener">our initiation note</a>, we highlighted that on a fundamental view, we believe that Jinke is attractive. However, we also noted that the poor post-IPO performance of recent property management IPOs despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on valuation grounds. </p></div></div></div>

Jinke Smart Services (9666 HK) is a Chinese property management company which is a subsidiary of Jinke Property Group (000656 CH). At the proposed IPO price range of HK$41.80-47.60 per share, Jinke will have a market cap of HK$26,455.7-30,126.6 million ($3.4-3.9 billion). At the mid-point of the IPO price range, Jinke will raise net proceeds of HK$5,738.1 million ($740 million). Ten cornerstone investors will subscribe for HK$2,673.7 million ($345 million) worth of the offer shares. The cornerstone investors include Taikang Life, Hillhouse Capital, Snow Lake Capital, CICC Capital, UBS Asset Management and Marshall Wace. In our initiation note, we highlighted that on a fundamental view, we believe that Jinke is attractive. However, we also noted that the poor post-IPO performance of recent property management IPOs despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on valuation grounds. 

Jinke Smart Services IPO: Valuation Insights

Jinke Property Group / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/jinke-smart-services" target="_blank" data-smartkarma-citation="entities:29214:1" rel="noopener">Jinke Smart Services (9666 HK)</a> is a Chinese property management company which is a subsidiary of <a href="https://www.smartkarma.com/entities/jinke-property-group-co-ltd" target="_blank" data-smartkarma-citation="entities:13291:1" rel="noopener">Jinke Property Group (000656 CH)</a>. From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. </p><div class="content-highlight"><p>Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs of <a href="https://www.smartkarma.com/entities/kwg-living-group" target="_blank" data-smartkarma-citation="entities:29231:1" rel="noopener">KWG Living Group (3913 HK)</a> and <a href="https://www.smartkarma.com/entities/shimao-services-holdings-limited" target="_blank" data-smartkarma-citation="entities:29199:1" rel="noopener">Shimao Services Holdings (873 HK)</a> are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.</p></div>

Jinke Smart Services (9666 HK) is a Chinese property management company which is a subsidiary of Jinke Property Group (000656 CH). From 2015 to 2020, Jinke was ranked first among the Top 100 property management companies as measured by overall strengths in the Southwestern China Region, according to China Index Academy. Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. Property developers continue to spin-off their property management arms due to tight credit conditions. However, sentiment on property management IPOs seems to have turned as recent IPOs of KWG Living Group (3913 HK) and Shimao Services Holdings (873 HK) are trading 20% and 5% below their IPO prices, respectively. The poor post-IPO performance despite good fundamentals was likely due to investors unwilling to pay a growth premium compared to an ever-expanding selection of listed peers. Overall, on a fundamental view, we believe that Jinke is attractive.

Jinke Smart Services IPO Initiation: Street Smart

China

Times Neighborhood Holdings Limited provides real estate services. The Company offers property management solutions such as cleaning, gardening, repairing, and maintenance activities. Times Neighborhood Holdings serves customers in China.

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Times Neighborhood (9928 HK)

Times Neighborhood: Beneficiary of Policy

This insight highlights an opportunity that has arisen in the property management company Times Neighborhood, which will have a 78% CAGR in profits...

Sameer Taneja

Sino-Ocean Services (远洋服务) IPO - Fairly Valued, at Best

Sino-Ocean Services (SOS) is the property management arm of Sino-Ocean Group. The company focuses on managing properties in first and second-tier...

Zhen Zhou, Toh

China Resources Mixc Lifestyle IPO: Valuation Insights

At the mid-point of the IPO price range, CR Mixc will raise net proceeds of $1.4 billion. We label this insight bearish as we would participate at...

Arun George

Jinke Smart Services IPO: Valuation Insights

Our valuation analysis suggests that Jinke is fully valued at the proposed IPO price range and we would be inclined to give the IPO a pass on...

Arun George

Jinke Smart Services IPO Initiation: Street Smart

Jinke has launched a Hong Kong IPO to raise net proceeds of HK$5,738.1 million ($740 million) at the mid-point of the IPO price range. On a...

Arun George

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