[ET Net News Agency, 8 November 2019] Nomura initiated coverage on A-living Services
(03319) with a "buy" rating and a target price of HK$32.2.
The research house said A-living is Nomura's top pick in the property management sector.
It likes A-living's first-mover advantage in public facilities management (non-residential
forms 56% of the area under management [AuM] after CMIG acquisition).
Nomura thinks this advantage could sustain its long-term AuM growth (it estimated the
public facilities PM market at CNY315bn with higher entry barriers)/margins (given better
pricing flexibility of public facilities management contracts) after peaking of the
residential property market.
It estimated A-living's AuM to record an 83% CAGR in FY2019-21 (excluding CMIG's 46%),
and a strong earnings CAGR of 33% over that period. (KL)