After a number of major asset restructuring, Yuexiu Financial Control has formed a characteristic local financial control platform architecture of shareholding CITIC and leasing + AMC+ capital operation. Strategic focus on Guangdong-Hong Kong-Macau Greater Bay Area, service economy new and old momentum transformation, based on strategic investment in high-quality financial equity, stabilize and strengthen Guangzhou assets, Yuexiu Financial Control Capital and Yuexiu Leasing, build a business-driven, strategic coordination, regional leading financial holding group.
From wholly-owned holding Guangzhou Securities to participating in CITIC: give up love in the short term and make a wise choice in the long term. Listed companies and Financial Control Co., Ltd. plan to sell 100% equity of Guangzhou Securities divested 99.03% of Guangzhou Futures and 24.01% of Golden Eagle Fund to CITIC for 13.46 billion yuan, and thus hold 6.26% of CITIC's shares. On December 26, 2019, the matter was approved by the Securities Regulatory Commission. At present, the supervision intends to create aircraft carrier-level head securities firms, and the competition pattern of the strong in the industry is gradually taking shape. In retrospect, CITIC PB/5 listed in the region on behalf of the securities firm PB gradually upward, the trading day (January 9, 2019) is 1.05, the latest value is 1.22X. We estimate that CITIC's contribution to the investment income of joint ventures and joint ventures to listed companies from 2020 to 2021 will be 5.34 yuan and 1.324 billion yuan respectively.
Yuexiu Leasing: the defect rate is very low, and the group's performance is a new pillar. Yuexiu Leasing takes local large and medium-sized state-owned enterprises as its core customer base; based on the Green people's livelihood Project, Yuexiu Leasing will vigorously expand the business fields of environmental protection water, tourism culture, transportation logistics and health care. The ROE of Yuexiu Leasing from 2016 to 2018 was 6.4%, 8.3% and 9.2% respectively, and the hub increased steadily. As the company is currently in a period of scale expansion, the improvement of operating performance caused by the downward financing cost on the liability side is more significant than that on the asset side. The estimated defect rates from 2019 to 2021 are 0.33%, 0.35% and 0.36%, respectively. The ROE is 9.4%, 9.9% and 10.5%, respectively. Low defect rate and deep ploughing of local resources are the core competitiveness of Yuexiu Leasing.
Guangzhou assets: two capital increases in Guangdong AMC upstart, the new bright spot of the group's performance. Guangdong Province has a huge economy and rich resources of non-performing assets. Guangzhou assets take advantage of its own geographical and shareholder resources, and the primary market share of non-performing assets in the province is more than 40%. Thanks to the rapid expansion of non-performing assets acquisition and investment business in Guangzhou, the company's net profit from 2019 to 2021 is expected to be 3.89,5.95 and 785 million yuan respectively, with a growth rate of 44.7%, 52.9% and 31.9% respectively.
Capital operation: newly set up financial control capital, cultivate Yuexiu industrial fund, incremental profit contributor. The company completed the establishment of financial control capital in February 2019, and together with the existing Yuexiu Industrial Fund to form a capital operation platform, the operating companies engaged in direct equity investment and industrial funds enjoy superior location advantages relying on Guangdong-Hong Kong-Macau Greater Bay Area, and the business synergy effect of the sub-plate under the flag is expected.
Investment suggestion: the company's net return profit from 2019 to 2021 is expected to be 18.13,17.56 and 2.772 billion yuan respectively, with year-on-year growth rates of 302.9%,-3.1% and 57.9%. After taking into account the one-time profit and loss of the sale of Guangzhou Friendship in 2019, the deduction of non-net profit is 6.94,17.6 and 2.77 billion yuan respectively, and the current stock price corresponds to 1.5,1.4 and 1.3x PB from 2019 to 2021. Cover for the first time to give a buy rating.
Risk hint: the process of major asset restructuring is lower than expected, and the macroeconomic recovery is lower than expected, dragging down both volume and price in the capital market.
