The growth rate of the main water business is slowing down, and venture capital is driving overall earnings. The year-on-year growth rate of Qianjiang's main water conservancy and water business revenue showed slight fatigue, falling continuously from 8.03% in 2013 to -0.57% in the first half of 2015, but the company's participation in Paradise Silicon Valley brought it large investment returns. In the first half of 2015, Qianjiang Water Resources's investment income in Paradise Silicon Valley reached 187.963 million yuan, far exceeding Qianjiang Water Resources's operating profit of 4,065 million yuan during the same period. Venture capital contributed to the company's overall revenue.
The country encourages venture capital, and the prospects for the venture capital industry are promising. From the end of 2014 to 2015, the country formulated various policies to encourage venture capital and improve the overall venture capital environment. In the first three quarters of 2015, China's venture capital investment exceeded 16 billion US dollars, and it is expected that the scale will continue to expand in the future.
There are many entrepreneurial projects in Paradise Silicon Valley, and the development trend is good. As of June 2015, there were 138 funds owned by Paradise Silicon Valley, with actual capital exceeding 10 billion yuan, a total of 194 investment and asset management projects, and assets under management exceeding 20 billion yuan. In 2014, Paradise Silicon Valley achieved a net profit of 7.7776 million yuan.
The IPO restart went hand in hand with the strategic emerging industry board plan to benefit the venture capital sector. The restart of IPOs and the proposed launch of the Strategic Emerging Industries Board will broaden the exit channels for venture capital, increase venture capital investment returns, and venture capital companies and listed companies that participate in venture capital companies will welcome the spring breeze.
Investment advice: Buy an -A investment rating, the target price for 6 months is 24 yuan. We expect the company's EPS from 2015 to 2017 to be 0.07 yuan, 0.25 yuan, and 0.29 yuan respectively.
Risk warning: The decline in the water business exceeded expectations, and the return on venture capital investment fell short of expectations