Dongguan Holdings disclosed its annual report for 16 and a half years. The realized income was 581 million yuan, an increase of 16.45% over the same period last year. The net profit belonging to listed companies was 404 million yuan, down 2.42% from the same period last year. The net profit after deducting non-profit was 370 million yuan, down 4.58% from the same period last year.
Steady development of the dual main business of "industry and finance": in terms of highway operation, the flow of toll vehicles reached 36.32 million in the first half of the year, an increase of 17.55 percent over the same period last year; operating income was 478 million yuan, an increase of 8.48 percent over the same period last year, and gross profit margin was 69.84 percent, an increase of 11.43 percent over the same period last year. Li-Shen Expressway, as the main road connecting Dongguan and Shenzhen, has a weak direct competition with the surrounding roads, and the CAGR of car ownership in Guangdong Province in the past five years is 14.2%. It is expected that the future growth rate can be maintained. In terms of financial leasing, the company strengthened fine management, broadened marketing channels, and realized operating income of 91 million yuan, an increase of 101.34% over the same period last year, with a gross profit margin of 71.35%, a decrease of 6.3% over the same period last year, and a net profit of 43 million yuan, an increase of 73.5% over the same period last year.
The downward trading volume hit Dongguan securities business, and the company's investment income shrank sharply: due to the negative impact of the securities industry in the first half of the year, the investment income contributed by the company's shares in Dongguan securities was 65 million yuan, down 62.6% from the same period last year.
In 15 years, the company's investment income was 425 million yuan, accounting for 43.8% of the company's operating profit. The decline in Dongguan securities performance in the first half of the year led to a decline in the company's investment income relative to operating profit to 28.7%, a decrease of 15.1 percentage points compared with the same period last year.
The fixed increase will help promote the strategic layout of "dual drive of industry and finance". The concept of national reform can be expected: in the first half of the year, the company's financial leasing business realized operating profit of 65 million yuan, accounting for 13.2% of the company's total operating profit, an increase of 6 percentage points over the same period last year. The company's strategy of deepening "dual drive of industry and finance" has achieved initial results. The company intends to raise 1.4 billion yuan through fixed increase, all of which will be used for the financing and leasing of the company's wholly-owned subsidiary. At present, the company holds 100% equity in Rentong Lease, 20% in Dongguan Securities, 6% in Dongguan Trust, 5% in Dongguan Changan Village Bank and 20% in Songshan Lake Micro-loan Company. The layout of the financial industry has begun to take shape. As the only state-controlled listed company in Dongguan, its parent company, Dongguan Transportation Investment Group Co., Ltd., has 11 investment, operation and management branches in the transportation field and related industries, with total assets of 34.531 billion yuan at the end of 2015. the asset securitization rate is 24.1%. Under the background of the reform of state-owned enterprises injecting group assets into the listing platform and creating a large platform and large industrial chain, there is an imagination space for the injection of high-quality assets into the parent company of the group.
Investment advice: we expect the company's revenue to grow by 18.9%, 15.3% and 17.7% respectively, and net profit to grow by 2.8%, 14.1% and 18.4% respectively from 2016 to 2018. The 6-month target price is 11.6 yuan, equivalent to 14.4 times 16-year earnings.
Risk hint: the reform of state-owned enterprises in Guangdong Province is lower than expected.