The company adjusts its restructuring plan and intends to inject 1.6 billion financial assets to build a financial control platform
The company adjusts its restructuring plan and plans to acquire 56% shares in Zhejiang Gold Trust, 100% shares in Dadi Futures and 50% shares in China and South Korea Life Insurance at a total price of about 1.6 billion per share. At the same time, 1.2 billion yuan of matching funds were raised by issuing shares of 17.04 yuan per share. The company will adhere to the "financial control + trade" two-wing development strategy, trade circulation is the traditional main business, financial investment is an important direction of strategic layout. After the completion of the transaction, it will set, trust, futures, insurance, financial leasing, industrial funds and other licenses to become the first comprehensive financial holding listed company in Zhejiang.
Financial control platform model ironing cycle to achieve multi-directional cooperation between plates
The construction of the financial control platform will help to integrate resources and channels and achieve business coordination from three aspects: finance, business and marketing. In the financial aspect, improve the utilization rate of funds; in the business, achieve resource sharing; in marketing, achieve a diversified portfolio of products. In addition, the transformation of financial control will help to iron out the license cycle and reduce earnings fluctuations, and the expansion of financial licenses will provide relatively stable profit support for the company.
The major shareholder ITC Group is rich in financial assets and has a broad space for business coordination.
The majority shareholder ITC Group is rich in financial assets, including non-performing assets management, banking, guarantee, factoring and so on. Relying on the resources of shareholders, the company is expected to carry out a variety of financial business cooperation, and explore the trade and financial industry-finance combination model, with broad space for cooperation.
Enjoy the geographical advantage and take advantage of the national reform policy
The regional economy of Zhejiang is developed, and the national strategies such as the construction of "Belt and Road Initiative" and the development of the Yangtze River Economic Belt are all closely related to Zhejiang, which is beneficial to the development of the company. The restructuring plan is a major strategic plan for the provincial party committee and provincial government to promote the overall listing of state-owned enterprises and the reform of mixed ownership, and to build the first financial control platform in Zhejiang Province, and will receive strong policy support.
Give a "buy" rating
Original business: business income is expected to decline by 5% in 16 years and achieve a growth rate of 5% and 10% in 17-18 years. Investment income maintains a growth rate of 3%, 5% and 7% in 16-18 years. The original business contributes 719 million, 741 million and 783 million to the parent profit. Considering the development strategy of transformation and upgrading, 20-22 times PE is given, and the corresponding estimate is about 14.4 billion-15.8 billion.
Target company: with reference to performance commitment, considering the characteristics of each company's industry and the thickening effect of capital increase on performance, it is carefully estimated that the target company will contribute 98 million, 130 million and 172 million of the parent profit from 2016 to 2018. In view of the synergy of the financial control platform, it is given 25-28 times PE, corresponding to a valuation of 2.4 billion-2.7 billion.
Comprehensive consideration: the net profit of Zhejiang Dongfang from 2016 to 2018 is expected to be about 720 million, 773 million and 834 million, the company's total market capitalization in 2016 is about 720 million-18.6 billion yuan, equity 672 million shares, target price 25-27 yuan. With a current market capitalization of 14.6 billion yuan (taking into account asset restructuring and ancillary financing), there is about 15% Murray 30% room for growth, maintaining the buy rating.
Risk hints: the economic downturn exceeds expectations, the risk of fluctuation in the capital market, and the policy risks related to mergers and acquisitions.
