Zhongtai: Maintains "buy" rating on POLY PPT SER (06049) as first half performance continues to climb

Zhongtai released a research report stating that POLY PPT SER (06049) is expected to maintain revenue growth in the first half of 2025, with stable growth seen in the core property management business from the breakdown of the business structure. The decline in revenue from value-added services is related to the overall downward trend in the real estate industry and adjustments in the business structure. The bank expects the company's EPS to be 2.88, 3.09, and 3.33 yuan/share for 2025-2027, corresponding to PEs of 11.0, 10.3, and 9.6 times, and maintains a "buy" rating. Key points from Zhongtai: POLY PPT SER released the 2025 interim report: The company achieved revenue of 8.39 billion in the first half of the year, an increase of 6.6% year-on-year, with a net profit attributable to equity shareholders of 890 million, an increase of 5.3% year-on-year. Steady revenue growth, continuous performance improvement In the first half of 2025, the company achieved revenue of 8.39 billion, a year-on-year increase of +6.6%. The revenue from property management services increased by 13.1% compared to the same period in 2024. The core business of property management services has a high growth rate, leading to an overall increase in revenue. The average property unit price has increased to 2.47 yuan/square meter, an increase of 0.14 yuan/square meter compared to 2024. Due to the downturn in the real estate industry and the overall environment, the revenue from non-owner value-added services decreased by 16.1%, and the revenue from community value-added services decreased by approximately 3.7%. The company's operating costs were 6.77 billion, an 8.0% year-on-year increase, with a gross profit margin of 19.4%, a 1.1 percentage point decrease year-on-year. The net profit attributable to equity shareholders was 890 million, an increase of 5.3% year-on-year. Expansion in scale, outstanding performance in third-party outsourcing Benefiting from the improvement in pricing standards for new projects, the average unit price of residential projects in the first half of 2025 has increased compared to the same period last year, with a gross profit margin for property management services of 16.6%, a decrease of 0.2 percentage points year-on-year. As of the end of the first half of 2025, the company's managed area from controlling shareholder Poly Developments and Holdings Group was 360 million square meters, an increase of 3.1% year-on-year. The company continues to receive continuous support from the controlling shareholder. At the same time, the company adheres to outsourcing and expands third-party projects. By the end of the first half of 2025, the company's managed area was 640 million square meters, accounting for 63.8%, an increase of 5.9% year-on-year. The annual contract value of new third-party projects is approximately 1.41 billion yuan, an increase of 17.2% year-on-year. The proportion of annual contract value of new third-party projects in core cities reached as high as 84.6%, an increase of 5.1 percentage points year-on-year. The ability to outsource is a guarantee for the continuous expansion of the scale of property management services. Solid fundamentals, improved operational efficiency As of the first half of 2025, the company had cash and cash equivalents of 9.65 billion yuan, a decrease of 2.5% compared to the end of 2024; the expense ratio was 5.4%, a decrease of 0.9 percentage points compared to the same period in 2024. Cash reserves remain healthy, and operational efficiency continues to improve. The company will focus on enhancing growth momentum, strengthening quality foundations, improving organizational effectiveness, and enhancing technological empowerment in the future, to achieve simultaneous increases in scale and efficiency. Risk warning: Unexpected downturn in the real estate industry, risks of impairment of accounts receivable, property fee collection rate lower than expected in the future.