The Zhitong Finance App learned that Anxin Securities released a research report saying that the three major factors that have limited the financial control valuation level of most central enterprises in the past have improved marginally: 1) the trust industry's risk exposure is expected to be mitigated to a certain extent; 2) gradually switching from a purely market-based evaluation perspective to a new perspective incorporating national conditions and policies; 3) “China Special Assessment” Dongfeng superimposes state-owned enterprise reform to stimulate vitality, which is expected to greatly increase the importance that market investors place on the strategic position of “Chinese” financial institutions. Based on the “China Special Assessment”, which is still expected to be an important investment line throughout the year, the importance of the industry-finance collaborative service strategy of national services is becoming more and more prominent. There are signs of marginal restoration in the financial control fundamentals of central enterprises, and core industrial finance platforms will continue to be recommended.
The main views of Anxin Securities are as follows:
The importance of “industry+finance” has increased significantly:
Under the guidance of a series of policies, continuously improving the real economic quality and efficiency of financial services has become a key direction and responsibility for the development of China's financial industry. The bank believes that industrial finance is an important form of finance to help the real economy. Effective integration of industry and finance can help improve the efficiency of the overall industrial chain and supply chain, achieve two-way collaborative development of “promoting production through finance” and “using production to help finance”, and strongly supports speeding up the construction of a modern industrial system. In the context of focusing on high-quality development and advancing modernization, the importance of industrial finance is self-evident.
The financial control division of the central enterprise is still undervalued:
Diversified finance awaits the rise of time. Financial holdings of most central enterprises have been in low valuations for a long time, mainly due to three factors: ① exposure to risk in the trust business, ② relatively low ranking in the subsidiary industry, and ③ valuation discounts on financial holding platforms. Looking at it now, among the financial control targets for central enterprises sorted out by the bank, 1) the number below the 1xPB standard in terms of valuation level is mostly below the 1xPB standard; 2) in terms of valuation levels, with the exception of CNPC Capital, all other targets are below the 30% level in the past three years.
Seize the “mid-term evaluation” opportunities in the non-silver sector:
Previously, the “mid-price” market for A-shares was well interpreted in sectors such as communications, petroleum and petrochemicals, and construction, but there is still room to explore in the non-bank sector, especially in the diversified finance sector. In the context of grasping the three main lines of national security, continuing to advance the reform of central state-owned enterprises, the State Assets Administration Commission meeting focused on mergers, acquisitions and restructuring, and the “Belt and Road” 10th anniversary catalysis, attention should be paid to the allocation opportunities of the non-banking sector in the “China Special Assessment” line.
The restoration of the bottom of the fundamentals is expected to reach an inflection point:
The 23Q1 performance of listed central enterprise financial holding companies all showed marginal signs of improvement. The 23Q1 net profit growth rate of the six listed central enterprise financial holding companies that the bank focused on was better than in the full year of '22. The bank expects that the performance of its financial sub-sectors, such as trusts, securities, leasing, and futures, is expected to pick up marginally to a certain extent, or drive the financial control fundamentals of central enterprises to gradually bottom out and rise.
Target aspect: The bank focuses on recommending China Aviation Finance (600705.SH), which has accelerated military asset securitization, significantly improved performance, and is undervalued. It superimposes the “military industry+central enterprise+industrial finance” concept. Currently, the valuation is below 1xPB. It is expected to fully benefit from the boost of “medium valuation”, the advancement of the market-based transformation of central military enterprises, and the increase in asset securitization rates. In addition, the bank also recommended focusing on CNPC Capital (000617.SZ), COFCO (002423.SZ), and Minmetals Capital (600390.SH), which have “central enterprise+industry and finance” attributes and are also expected to benefit from “China Special Valuation.”
Risk warning:Large fluctuations in market conditions, changes in the popularity of the China Special Estimate Market, potential uncertainty in financial regulation, etc.