Main points of investment:
Yueda Investment released its 2015 interim report that the company's operating income in the first half of the year was 906 million yuan, down 8.04% from the same period last year, while the net profit belonging to shareholders of listed companies was 280 million yuan, down 42.92% from the same period last year. The decline is mainly due to a decline in sales of Yueda Kia, in which the company is a shareholder, and a sharp drop in sales margins and investment income as a result of increased sales discounts.
2015 due to the slowdown in demand and the release of manufacturers' production capacity in China, vehicle companies generally encounter sales difficulties and declining profits, so Yueda Kia's performance decline in the first half of the year has been expected. In the second half of the year, the company is expected to improve sales performance by launching new models (new K5), strengthening marketing and other means, while ensuring long-term competitiveness by increasing the research and development of new energy models and introducing competitive products from South Korea in the future. In addition, Yueda's textile companies are expected to reduce losses to a large extent throughout the year.
Yueda Investment is the listing platform of Yueda Group (controlling shareholder), a large state-owned enterprise in Jiangsu Province, and its future prospect is promising. Yueda Group, as a strong and newly appointed management of Yancheng key state-owned enterprises, attaches great importance to the future growth of the enterprise and pays close attention to the strategic layout of emerging industries. With the deepening of the effect of local state-owned enterprise reform, group companies will adopt professional management and organizational structure to match industrial development, and listed companies are expected to benefit. Yueda Investment itself is also a diversified investment platform, and its business focus is expected to focus on future growth businesses such as automobile-related, new materials, and other emerging industries. with the more reasonable use and allocation of resources (including capital operation, etc.) of listed companies, there is a huge room for market capitalization.
Continue to be optimistic about the future growth of Yueda Investment as a diversified investment platform. EPS from 2015 to 2017 is expected to be 0.71,1.11,1.50 yuan. With the continuous strengthening of local state-owned assets reform, listed companies will benefit from the efficiency improvement brought about by the professional management system, the loss sector is also expected to be rectified, and the growth expectation is more promising.
The price-to-earnings ratio from 2015 to 2017 is 13.7x, 8.8x and 6.5x. Continue to "buy" rating.
Risk hint: China's auto sales have slowed since 2015, joint venture brands have set off a wave of price cuts, and Yueda Kia's sales and profit margins will still face challenges in the second half of the year. Textile and coal are under the pressure of loss due to the influence of industry and macro-economy. The layout of business development of group companies and listed companies is still in the research stage.