What happened: the company recently released its 2019 mid-term report, with an operating income of 1.631 billion yuan, an increase of 11.31% over the same period last year, and a net profit of 508 million yuan, with an EPS of 0.24 yuan.
The thermoelectric business has developed steadily. The company is one of the large local cogeneration enterprises in Harbin. In the heating area approved by the government, the company has regional heating franchise, obvious regional monopoly advantages, stable users and less competitive pressure in the same industry. The operating income and operating cost of 2019H thermal power sector increased by 0.39% and decreased by 4.81% respectively compared with the same period last year. Jianghai Securities has achieved remarkable results. In the first half of the year, Jianghai Securities realized operating income of 1.179 billion yuan, an increase of 117.53% over the same period last year, and realized a net profit of 446 million yuan, turning losses into profits. From a business perspective, brokerage, proprietary management, investment banking, asset management and credit revenue accounted for 17.8%, 53.4%, 20.1%, 4.2% and 3.6%, up 23.83%, 430.82%, 218.14%,-27.74% and-63.1% respectively over the same period last year.
The corresponding valuation of Jianghai Securities is only 1.16xPB, and the margin of safety is prominent. The thermal power, environmental protection and engineering parts of Harbin Investment Co., Ltd. are expected to be valued at 500 million, while the available-for-sale financial assets (China China Minsheng Banking Corp and founder Securities) are valued at 1.9 billion. At present, of the total market capitalization of Harbin Investment shares of 14.1 billion, Jianghai Securities corresponds to about 11.7 billion yuan. The corresponding PB of Jianghai Securities is 1.16x, which is significantly lower than the current industry valuation of 1.62x, and the margin of safety is prominent.
Investment suggestion: we predict that the company's operating income in 2019, 2020, and 2020 will be 31878, 3506, 38.56 million, respectively, and the net profit will be 8.56, 954, 10.10 million, respectively, and the corresponding EPS will be 0.4, 0.45,0.48, respectively. The target price is 8.06 yuan per share, corresponding to 19-year PE20.15 times, maintaining the "buy" investment rating.
Risk hint
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 results in the risk of stock pledge; the risk of stock market volatility.