[ET Net News Agency, 12 January 2021] Goldman Sachs initiated coverage on China
Resources Mixc Lifestyle Services (CRMLS) (01209) with a "neutral" rating and a target
price of HK$39.
The research house said the company stands out relative to its existing property
management (PM) coverage on its well-established strength in commercial PM, a segment that
has a much higher industry entry barrier and might consolidate faster.
Therefore, unlike its residential PM peers, which do not have much differentiation
between one another, commercial operational services, as the brain of commercial property
management, deserve a valuation premium as the focus in this segment could translate into
much higher and visible earnings growth potential and sustainability in the longer run.
Goldman expects a 75% underlying earnings CAGR in 2020-22 followed by relatively
moderate but sustainable 30% in 2022-24, given (1) robust project pipeline from CR Land
(01109), (2) accelerating third-party expansion and the start of M&A activities in 2021,
(3) meaningful margin improvement potential from current industry bottom levels, and (4)
substantial headroom for community VAS development from a low base and stronger
integration of different property types. (KL)