Event: the company released its quarterly report for 2020, with total operating income of 836 million yuan, down 2.41% from the same period last year; net profit of shareholders belonging to listed companies was 288 million yuan, an increase of 8.99% over the same period last year; and earnings per share was 0.178 yuan per share.
Main points of investment
The company achieved a net profit of + 8.99% in the first quarter of 2020 compared with the same period last year, and the performance was in line with expectations. 1) due to the income from the trust plan of Aijian Trust in the first quarter of 2020, the investment income increased by 158% to 150 million yuan compared with the same period last year, driving the first quarter net profit of 290 million yuan, an increase of 8.99% over the same period last year.
The company's business expansion in 2019 led to the growth of both the revenue side and the expense side, maintained steady development as a whole, and its performance was in line with expectations. 2) in the first quarter of 2020, due to the epidemic and Aijian Trust continued to go to the channel, the overall trust scale declined (the proportion of active management increased), resulting in the net income of fees and commissions-12% to 310 million yuan compared with the same period last year. The company continues to strengthen its active management capacity, strive to overcome the complex situation such as the deepening of financial deleveraging and the intensification and tightening of real estate financing policies, and improve the rate of return on trust, which is expected to alleviate the pressure of strict trust policy to a certain extent.
Under the strict supervision of trust, it is expected to be under pressure, leasing contributes to stable performance, and multiple layouts create a comprehensive financial service system: 1) under the new regulations on capital management, the scale of channel and multi-tier nested business is constantly compressed, and the structure of trust business is constantly optimized. It is expected that the company's active management capacity will be enhanced, and the average annualized comprehensive trust return rate in 2019 will be higher than that of last year. 2) at the end of September 2018, the company received 100% equity of Huarui Leasing under Junyao Group, a major shareholder, to complete the leasing areas such as aviation and spare engines, and achieved a net profit of 110 million yuan in 2019. Superimposed Aijian financial leasing (2019 net profit of 80 million yuan), the leasing sector contributes stable performance for the company. 3) the company has diversified financial layouts. At present, the company already has many financial subsidiaries, such as Aijian Securities, Aijian Trust, Aijian Leasing, Aijian Wealth, Aijian assets, etc., superimposing the industrial advantages of shareholder Junyao Group. The combination of industry and finance is expected to create a comprehensive financial service system to achieve the further development of the company.
Major shareholders continue to increase their holdings of Aijian, and asset operation efficiency is expected to improve: 1) Junyao Group has been increasing its holdings since 2019, and as of March 20, 2020, the shares of the company accounted for 29.00% of the total share capital of the company. In the next six months, it is planned to increase 0.1% to 0.5% of the company's total share capital by means of centralized bidding system, block trading system, agreement transfer, etc., demonstrating shareholders' confidence in the company. 2) Junyao Group is mainly industrial investment, and has formed five major sectors: air transport, financial services, modern consumption, educational services and scientific and technological innovation. Aijian Group, as the core force of its financial sector, is expected to achieve business interconnection with other sectors and promote the common development of industry-finance integration. 3) the company adopts market-oriented incentives to attract a large number of excellent external teams to provide a talent basis for the active management of business transformation and the establishment of a direct marketing system, which is expected to improve asset operation efficiency and promote the steady growth of trust performance in the future.
Profit forecast and investment rating: trust supervision is tightening and pressure, the company's profitability and operational efficiency may continue to improve, optimistic about the development potential of the company's comprehensive financial platform. The company is expected to have a net profit of 14.0 yuan in 2020 and 1.46 billion yuan in 2021, maintaining a "buy" rating.
Risk tips: 1) strict trust supervision; 2) decline in the quality of leased assets.