Event: Harbin Investment Co., Ltd. released its 2018 annual report, with a total operating income of 2.759 billion yuan, + 7.73% compared with the same period last year. The net profit returned to its mother was-142 million yuan, down 139.66% from 358 million yuan in 2017. By the end of 2018, the company had total assets of 38.909 billion yuan and net assets of 12.576 billion yuan. ROE was-1.09%, down 3.73% from the same period last year.
Of this total, Jianghai Securities achieved revenue of 1.259 billion yuan,-7.01% year-on-year, and net profit of-177 million yuan, down 160.69% from 292 million yuan in 2017. The total assets of Jianghai Securities are 33.574 billion yuan; the net assets are 9.748 billion yuan at the end of the year and 10.128 billion at the end of the first quarter of 2019.
Market value disassembly valuation is low, high security and good flexibility. The thermoelectric, environmental protection and engineering parts of Harbin Investment Co., Ltd. are expected to be valued at 500 million, while those with available-for-sale financial assets (China Minsheng Banking Corp and founder Securities) are valued at 2.193 billion. Statically, the current PB valuation of Jianghai Securities is 1.40 times, lower than the current brokerage valuation of 1.88x.
Public utilities + securities firms, double main industry rotation. The company has a heating franchise in the heating area approved by the government, with obvious monopoly advantages and less competitive pressure in the same industry. In 2018, the revenue of the thermal power business reached 1.195 billion yuan, an increase of 0.86 over the same period last year, accounting for 43.45%. In the brokerage sector, brokers, proprietors and investment banks are the main sources of income, accounting for 25.66%, 23.35% and 26.05%, respectively.
Investment suggestion: we predict that the company's total operating income in 2019 will be 3.609 billion yuan, net profit will be 1.281 billion yuan, and the corresponding EPS will be 0.53 trillion yuan per share.
Risk hints: the activity of market transactions and the persistence of incremental funds are not up to expectations; the rapid decline of the share prices of some pledged stocks causes the risk of stock pledge; the risk of stock market volatility.
