- September 22, 2020
Key Highlights:
- We believe the acquisition of Liantianmei Corporate Management is a major step forward in the development of Aoyuan’s Healthcare Business, securing the company’s long term growth prospects.
- Following the latest acquisition, we believe Aoyuan is on track to deliver a 51% YoY 2021E net profit growth, with the stock trading at 11.2x 2021E P/E. We reiterate our Buy Rating.
- When many of its property management peers are still focusing on the Red Ocean Strategy in scaling up the property management business, Aoyuan Healthy Life has entered into the Blue Ocean in combining Property Management with Healthcare Services.
- We believe market’s concerns with the execution risks are overdone, as the company now has a healthcare specialist team to implement and execute the expansion plans. We believe the potential financial rewards and business diversification outweigh such concerns.
