Main points of investment:
Maintain the overweight rating and maintain the target price of 9.19 yuan. The company's 17H1 revenue / return net profit is RMB 19.72 billion, compared with the same period last year, the net profit of Q2 is RMB 630 million, which is in line with our expectations. The continued growth of C2 consolidation and leasing business in the second quarter led to a sharp increase in the company's first-half net profit compared with the same period last year. The company plans to issue no more than 8 billion yuan of preferred shares, which will ease the financial burden of the company, continue to be optimistic about the economies of scale brought about by the integration of aircraft leasing assets, and maintain EPS0.44/0.57/0.77 yuan for 17-19 years, with a target price of 9.19 yuan, corresponding to 17P/B 1.8X, 17Phand E 21X.
The aircraft leasing business is growing rapidly, and the scale effect appears. 1) during the reporting period, the company completed the delivery of GECAS45 aircraft asset packages, completed the transfer of ownership of aircraft leasing assets C2 and the integration with Avolon, and significantly expanded the size of the fleet; at the same time, by continuously deepening the integration of personnel and systems in the aircraft leasing section, the scale effect gradually appeared. 17H1 aircraft leasing business revenue + 105% year-on-year, gross profit margin + 405 BP. 2) in 17 years, the revenue of H1 container leasing business was-4.6% compared with the same period last year, and the gross profit margin was-228BP compared with the same period last year. Since the first half of this year, there have been obvious signs of recovery in the international shipping market, and the container rental rate has increased to a certain extent. It is expected that the follow-up performance will gradually recover. 3) the overall revenue of 17H1 domestic financial leasing sector is 1.9 billion yuan, which is + 10% compared with the same period last year, and the overall gross profit margin is + 260BP.
It is proposed to issue 8 billion yuan of preferred shares to ease the financial burden. 1) the company intends to issue no more than 8 billion yuan of preferred shares to replenish working capital, of which HNA Capital, the controlling shareholder, has pledged to subscribe for 20% of it. This financing will ease the financial burden of the company, and the estimated asset-liability ratio after the issue will be reduced from 87.6% to 85.4%. 2) in order to further strengthen the integration of aircraft leasing business, the subsidiary Avolon plans to acquire a minority stake (10.01%) in HKAC for US $200 million to be wholly owned, and to increase its cash capital by US $2.38 billion.
Risk hint: business integration is not as expected, container performance growth is not as expected.
