Equity Analysis /
Hong Kong

HK : Shimao Services - Parent’s health a drag on its valuation

    Raymond Cheng
    Raymond Cheng

    Head of Hong Kong Research

    Steven MAK
    Will Chu
    13 April 2022
    Published byCGS-CIMB

    Shimao Services reported a 51% yoy increase in core net profit in FY21 and intends to maintain a payout ratio of 30%. We expect slower 3P expansion due to the weak property market and for community VAS to continue to drive revenue at the expense of GPM. The tripled FY21 impairment provisions had little impact on its liquidity, given its high net cash position. Downgrade to Hold with a lower TP of HK$5.