Event: on December 2, 2015, Dalian Friendship issued a transaction plan (revised version) to issue shares to purchase financial assets and raise matching funds, in order to achieve business extension. After this reorganization, Wuhan Financial Control will become the actual controller of the company, and Wuhan SASAC will become the final controller. The specific plan is as follows: Dalian Friendship plans to issue a total of 660 million shares to the two counterparties of Wuxin Investment Group and Wuxin Management Company to purchase the 100% equity of Wuxin guarantee Group, Wuhan small and medium-sized guarantee Company, Wuhan Entrepreneurship guarantee Company, Wuhan Xinfa Investment Company, Wuxin small loan Company, Wuhan Credit Company, 90% stake in Wuxin rating company and 70% stake in Hanxin Internet Finance. At the same time, Dalian Friendship plans to issue no more than 270 million shares to no more than 10 other specific investors to raise matching funds of no more than 3 billion yuan.
The development of the main business encountered a bottleneck: the company's three main businesses, department store retail, hotel and real estate performance declined in an all-round way. According to the annual report, the company's operating income in 2015 was 2.7938412 billion yuan, down 22.33% from the same period last year, and the net profit belonging to shareholders of listed companies was-187.0493 million yuan, down 431.31% from the same period last year. In order to seek new sources of profits, the company announced that it intends to expand its business to guarantee, credit, credit and Internet financial services through epitaxial acquisitions, so as to form synergy and complementarity with existing businesses to achieve the "financial plus" strategic transformation.
Expand financial business by extension and realize the strategic transformation of "finance +": guarantee, credit, credit and Internet finance form a complete business chain, and guarantee and credit are the company's core business. credit information business provides data basis and reference for company guarantee and credit, while Internet finance builds an interactive platform to attract customer traffic. It will provide a broad space for expanding financing channels and developing all kinds of innovative business in the future. (1) financing guarantee business section. The guarantee business sector involves three target companies: Wuhan Entrepreneurship guarantee Company, Wuhan small and medium-sized guarantee Company and Wuxin guarantee Group. The main business of the three companies is to provide financing guarantee services for small and medium-sized enterprises to help small and medium-sized enterprises solve the problem of bank credit. (2) the credit business section. The credit business section involves two target companies: Wuhan CITIC and its subsidiaries, Wuxin small loan Company. The two companies mainly provide direct credit services to small and medium-sized enterprises. (3) Credit business plate. The credit business section involves two target companies: Wuhan Credit Co., Ltd., and Wuxin rating Company. The two companies mainly provide customers with corporate credit analysis reports and credit rating services. (4) Internet financial business plate. Hanxin Internet was founded in September 2014, relying on the "Hanjin Institute", engaged in P2P business, the main operation mode is the creditor's rights transfer mode.
Wuhan Financial Control has the expectation of asset injection: Wuhan Financial Control is the financial platform of Wuhan SASAC, which has many member enterprises. including Hankou Bank, Wuhan Rural Commercial Bank, Wuhan Credit risk Management Co., Ltd., Wuhan Financial assets Exchange Co., Ltd., Donghu Industrial Investment Fund Management Co., Ltd., founder East Asia Trust Co., Ltd. The financial assets injected by Dalian Friendship will help to ensure the company's operating profits, improve the company's profitability and liberate the company's cash flow pressure in real estate business and hotel business in the short term. In the long run, Dalian Friendship layout "Finance +" transformation, the main business and financial business to achieve coordinated development, opening up business development space.
Investment advice: buy-An investment rating, 6-month target price 16.5 yuan. We expect the company's revenue growth from 2016 to 2018 to be 37.6%, 9.3% and 6.7% respectively, with outstanding growth. For the first time, the company has been given an investment rating of Buy-A, with a six-month target price of 16.50 yuan.
Risk hint: the investment return of the target company is lower than expected, credit risk