Introduction to this report:
The company's PE performance increased dramatically, due to the large number of project withdrawals during the reporting period and a sharp increase in management remuneration revenue. Under the acceleration of IPO issuance, the company's performance will be released at an accelerated pace. In the next step, the company will comprehensively promote investment and financing transformation and upgrading.
Key points of investment:
Maintain the “increase in holdings” rating and maintain the target price of 75.46 yuan/share. The company achieved revenue/net profit of 1,644/628 million yuan in 2016, +46.31%/+119.15% over the same period; 2017Q1 achieved revenue/net profit of 147/55 million yuan, -40.45%/+82.92% year on year. The company's performance was in line with expectations. The sharp increase in the company's net profit in 2016 stemmed from the merger of the company's PE business and the large number of projects withdrawn during the reporting period, which led to a sharp increase in management remuneration income. The sharp increase in 2017Q1 net profit was also due to a sharp increase in the company's investment income. Based on favorable factors such as accelerated IPO issuance, the company's EPS (dilution) for 17-19 was raised to 2.26/3.14/3.94 yuan (before adjustment, the EPS for 17-18 was 0.94/1.08 yuan), maintaining the target price of 75.46 yuan/share and increasing holdings.
During the reporting period, the comprehensive IRR of the company's exit projects reached a record high of 43.76%, and the company's reserve projects were abundant. In the context of accelerated IPO issuance, performance will be released at an accelerated pace. By the end of 2016, the company managed equity funds had a cumulative principal amount of 34.15 billion yuan, a cumulative investment scale of 27.334 billion yuan, and a cumulative comprehensive IRR of 35.74%. Eight new successful IPOs were added to the list of invested companies in 2016, and the total number of invested companies that successfully completed the company's main board meeting in '17 reached 6. Of these, 4 have already been listed and traded. The buoyancy of the listed projects will drive rapid growth in the company's future investment income.
The company will continue to adhere to the three major investment sectors of PE investment, VC investment, and real estate and fixed income investment, which are mainly mergers and acquisitions, and clearly use “integrated investment” under the “new normal” of the economy
As the core investment strategy to promote the comprehensive transformation and upgrading of the investment and financing business, the scale of funds under management and investment scale are expected to expand further from the current level in the future. As a scarce target for A-share private equity investment, we are optimistic about the company's development prospects.
Risk warning: capital markets fluctuate greatly; IPO issuance is not as fast as expected; regulations are being strengthened.