China's largest Internet auto financial trading platform, backed by Tencent, JD.com strategic investor platform.
The company is mainly engaged in automobile trading platform business and proprietary financing business: (1) trading platform business:
To facilitate consumer car purchase transactions, to enable the company's auto financing partners to provide car loans to consumers, to provide value-added services such as car sales network systems for car dealers, to provide advertising and membership services for automobile manufacturers, dealers, auto financing partners and insurance companies; (2) self-financing business: to provide car financing solutions to consumers through financial leasing and operating leasing. 21H1's trading platform business revenue was 810 million yuan, an increase of 63.39% over the same period last year, accounting for 57% of revenue; revenue from proprietary financing business was 606 million yuan, down 46.31% from the same period last year. The company's shareholders, including Tencent, JD.com and other strategic investors, are expected to further integrate into Tencent's automobile ecological chain and solve industry problems such as capital, risk control, flow scenarios and so on. As of the first half of 2021, the company's cumulative trading volume exceeded 2.2 million, with a cumulative transaction volume of nearly 200 billion yuan.
The overall passenger car sales market is stable, and the sales of used cars and new energy vehicles are growing rapidly. 21H1 sold 7.067 million used cars in China, an increase of 56 percent compared with 20H1's 4.536 million. The sales of new energy vehicles are growing rapidly and the penetration rate is increasing rapidly. The penetration rate of new energy vehicles rose from 5.4% at the beginning of the year to 9.4% in the first half of the year in 2021.
Targeting second-hand cars, new energy vehicles, automotive finance blue ocean market, the company's business development is smooth. There are few financial participants in second-hand cars, mainly third-party platforms, financial leasing companies and some joint-stock banks, which belong to the blue ocean market compared with new cars. With policy encouragement and increased consumer recognition, new energy vehicles are growing rapidly, with 21H1 sales of 1.14 million vehicles, an increase of 122% over the same period last year, and a huge market space. With the overall improvement of the penetration rate of auto finance, the scale of China's auto finance market is growing rapidly. The size of the 21H1 market is about 2 trillion yuan, with an average compound growth rate of about 16.5% from 2017 to 2020. In terms of business development, the company has signed contracts with NIO Inc., ideal, Shaanxi Automobile Commercial vehicles, Sinotruk and other important partners. In terms of transaction volume, 21H1 used cars increased by 95% over the same period last year, with an overall increase of 88% over the same period last year.
Profit forecast: the company's revenue from 2021 to 2023 is expected to be 35.26 / 43.43 / 5.142 billion yuan, and the net profit is 2.52 / 5.06 / 716 million yuan respectively. The current stock price corresponds to a PE of 21.97 / 10.94 / 7.73 times. For the first time, it covers the "buy" rating, corresponding to the target price of HK $1.34 per share.
Risk tips: concentrated exposure of credit risk, performance forecast and valuation judgment are not up to expectations, etc.
