The results of the three quarterly reports are good, in line with our expectations.
In the first three quarters, the company achieved revenue of 21.104 billion yuan, YoY 1%; net profit of 4.996 billion yuan, YoY of 27%, weighted average return on net assets of 7.34%, and the performance was in line with our expectations. The net profit of Q1Q2Q3 is 14.43 million yuan and 2.46 billion yuan respectively. Under the macro background of steady and neutral monetary policy, comprehensive and strict supervision, and strengthening "deleveraging" and MPA in the financial industry this year, the company has actively responded to changes in the external environment, established a regular internal communication and coordination mechanism, made every effort to promote the sharing of resources such as products, channels, customers and services, deepened the reform of internal systems and mechanisms, and actively assisted financial enterprises in carrying out equity investment, industry-finance integration business and bond issuance. The development of each business is steady and good.
12.9 billion yuan capital increase trust, lease and bank completed, and financial control is ready to go.
(1) Trust: in January 17, Kunlun Trust completed an increase of 7.2 billion yuan, and its registered capital increased from 3 billion yuan to 10.2 billion yuan, of which PetroChina assets, a wholly-owned subsidiary of PetroChina Capital, increased by 5.9 billion yuan, and its shareholding proportion increased from 60% to 82%. (2) Leasing: in January 17, Kunlun Leasing completed an increase of 2 billion yuan, and its registered capital increased from 6 billion yuan to 8 billion yuan, of which PetroChina Capital increased by 1.2 billion yuan. (3) Bank: in April 17, the company used the raised funds to exchange 5.8 billion yuan of self-raised funds for the pre-invested project "increasing capital to Kunlun Bank".
The financial platform with both depth and breadth relies on Petrochina Company Limited's collaborative characteristic management.
The company's financial sector covers banking, financial companies, financial leasing, trust, insurance, insurance brokerage, securities and credit promotion and other areas, complete license, large-scale business. At the same time, the company relies on Petrochina Company Limited Group, the industrial chain has huge customer resources, each production and operation link contains rich demand for financial services, there is a broad space for the combination of industry and finance, and the company makes great efforts to expand the market of the industrial chain. give full play to the business familiarity with oil, gas and related industries, form a differentiated competitive advantage different from other financial enterprises, and effectively expand the depth and breadth of industry-finance integration. Enhance the value creation ability of financial enterprises.
Deepen the reform of state-owned enterprises and promote the development of state-owned capital
General Secretary Xi Jinping made it clear in the report of the 19th CPC National Congress that it is necessary to deepen the reform of state-owned enterprises and promote state-owned capital to become stronger, better and bigger. We expect that the mixed reform of central enterprises will be speeded up in an all-round way in 2018. Xiao Yaqing, director of the State-owned assets Supervision and Administration Commission, said at a press conference on September 28 that two batches of 19 central enterprises have been established. the areas of mixed reform cover key industries such as electric power, oil, natural gas, railway, civil aviation, telecommunications and military industry, and the third batch of pilot list is under study. In addition, the enterprise level involved in the mixed reform has also been gradually promoted from the third-level sub-enterprises of the central enterprises to the second-level sub-enterprises and groups.
Shareholder resources + full license financial control + small circulation, maintain overweight rating
It is estimated that the EPS of the company from 2017 to 2019 is 0.70, 0.77, 0.84 respectively. The company relies on Petrochina Company Limited to play a synergistic effect, and the sustained profits of financial assets are guaranteed; and at present, the current market value is only about 2 billion yuan (October 27, 2017). The circulation market is small and flexible, which is the preferred target of funds. Since the beginning of this year, affected by the market situation, the valuation level of the diversified financial sector has been under pressure, which is about 22 times higher than the company's Wind consensus forecast of 18 years'PE level, but considering the obvious advantages of the company's shareholder resources + full license financial control + circulation plate, it gives the company 26-30 times PE in 18 years, lowering the target price to 20-23 yuan (the previous value is 24-26 yuan) to maintain the overweight rating.
Risk hint: business synergy is not as expected, market volatility risk, transformation failure.