Main points of investment
1. A typical "big group, small company"
Shentong Metro Group, a major shareholder, holds 58.43% of the company's shares. 1) in terms of asset scale, the total assets of the group are about 300 billion, and the net assets are about 180 billion, which are 122times and 125times of those of listed companies respectively. 2) the company's main business includes subway operation, financial leasing and investment business. Revenue is stable and rising costs lead to a decline in gross profit.
two。 Stone from other mountains: how to play "rail communication + property"?
Hong Kong MTR: a model of "rail transit + property" model, achieving a market capitalization of HK $250 billion. Diversified business ensures steady income growth and sustained profitability, with profits related to property development and investment accounting for about 30%.
Shenzhen Metro: active capital operation and exploration. 1) the value of the land to be injected into Vanke is considerable, and there is a broad profit space in the future. 2) the land reserve is rich, and the development mode of "rail transit + property" has been established, with a net profit of 534 million yuan in 2015.
Beijing Investment Development: 1) the gross profit margin of properties built above the subway is more than 50%, which is much higher than that of other real estate projects.
2) the opening of the subway brings a significant appreciation of the surrounding land.
3. Shentong Metro Group: from Metro Construction to Urban Comprehensive Operation
1) the scale of assets exceeds that of Shenzhen Metro, and its profitability lags far behind. 2) ticket revenue is still the main source, but the non-ticket business can not be ignored. 3) the group practices superstructure property development and has the advantage of taking land. in the future, it can break through the chain of low-cost land acquisition, secondary transfer, return and anti-rail construction.
4. Five conjectures about the State Reform of Shentong Metro:
1) conjecture 1: group non-ticket business injection. In 2014, the group's rail transit extension business, technical consulting services and subway advertising revenue of 1.59 billion, gross profit of 1.04 billion, 2.1 times and 11.3 times that of listed companies. 2) conjecture 2: imitate Shenzhen Metro and inject land resources. Explore the "rail traffic + property" MTR model, win-win asset appreciation, while listed companies obtain new sustainable profit growth points.
3) conjecture 3: how much is the possible injection of road production? The operating mileage of road products in listed companies is less than 5% of that of the group, but the profitability of other road products is not good.
4) conjecture 4: the shell is for his use? With reference to the asset restructuring of public transport assets made by Shanghai State-owned assets, cross-group asset replacement is also possible.
5) conjecture 5: endogenous development without considering asset reorganization. Develop business through the investment fund model above the rail transit, and vigorously develop financial leasing to enhance the competitiveness of listed companies.
(5) profit forecast and valuation: for the first time, the "recommended" rating is given. 1) without considering asset restructuring, it is estimated that the company's EPS from 2016 to 2018 will be 0.15,0.16,0.22 yuan respectively, and the corresponding PE will be 97x, 90x and 63x respectively.
2) the asset securitization rate of the group is on the low side, and the profitability of listed companies is weak. We believe that with the help of the reform of the east wind, listed companies are expected to rely on the group to build more profitable sustainable business. On the other hand, MTR Corporation, if the company locates its strategy in the "rail communication + property" model in the future, it can open up long-term growth space. Cover for the first time and give a "recommended" rating.
3) Catalyst: the reform of state-owned enterprises in Shanghai has been promoted, and the capital operation of Shenzhen Metro has been further promoted.
4) risk points: the reform of state-owned enterprises is lower than expected.
