Peace viewpoint:
Enamelled wire manufacturer, Xianfeng Mining Co., Ltd. has taken a strong position and started to increase: the company is currently the largest professional manufacturer of fine enamelled wire among domestic enterprises. Due to macroeconomic weakness, copper prices continue to fall, the company can only achieve weak profits. On April 28, 2014, Xianfeng Mining Group transferred 25.00% of the shares of the company held by the former major shareholder to become the controlling shareholder. after entering the company, Xianfeng Mining Group launched a fixed increase plan to raise 1.012 billion yuan to repay bank loans and replenish working capital. The listing was successfully implemented on April 26th, 2016. thus, the proportion of shares held by Xianfeng Mining and its concerted actor Xianfeng Investment has increased to 40.06%.
The transformation of financial control, license plate + talent layout is rapid and powerful: Xianfeng Mining Group is a private comprehensive group company with resources as the core. After becoming a major shareholder of the company, it opens the road of financial transformation. In just one year, we quickly laid out commercial factoring, financial leasing, joint venture securities firms and commodity trading centers, and quickly recruited talents in related industries, and successively replaced important positions such as Dong Lianchang, general manager, deputy general manager, financial director, and so on. the new executives are all people with rich experience and resources in the financial industry, mining industry and related fields. License plate + talent layout is rapid and powerful, reflecting the company's determination to transform and strong strength.
Take the commodity exchange as the core, march to the full license: in the construction of the financial control platform, the company takes Hengqin International Commodity Trading Center as the core and relies on the field of non-ferrous metals and precious metal mineral resources where the major shareholders are located. Set up commercial factoring and financial leasing companies to cut into the financial field with supply chain finance; propose to set up a full-license joint venture securities firm with scarce licenses and expected landing date; hold Hengqin International Commodity Trading Center and look forward to settling over-the-counter transactions in RMB. It is expected that in the future, the company will march into the full license and actively apply for insurance, fund, bank and other licenses.
Profit forecast and valuation: assuming that only commercial factoring and financial leasing are taken into account, without considering the profit improvement brought about by other financial licenses, the company's operating income from 2016 to 2018 is 913 million yuan, 1.193 billion yuan and 1.395 billion yuan respectively, and the net profit belonging to the shareholders of the parent company is 111 million yuan, 159 million yuan and 192 million yuan respectively, and the EPS is 0.34 yuan, 0.49 yuan and 0.59 yuan respectively. The corresponding PE of the current stock price is 102.7 times, 71.4 times and 59.1 times respectively.
As the company is in the early stage of transformation, it is difficult to value from the perspective of profitability, so we use the comparable method of similar companies for valuation. At present, among the A-share transformation financial control listed companies with brokerage licenses, the market capitalization is the smallest, including Baoshuo shares and Huasheng shares. The latest stock price calculates that their total market capitalization (calculated by the equity after additional issuance) is 16.874 billion yuan and 27.138 billion yuan respectively. Rongsheng's market capitalization is 11.334 billion yuan. According to the company's development plan, we believe that 100-15 billion is a reasonable market capitalization range, covering for the first time and giving recommended investment rating.
Risk tips: 1, the joint venture securities license can not be approved risk; 2, Hengqin International Commodity Trading Center business development is lower than expected risk.