Win-win with customers: from the leader of supply chain service to creating value with customers. 1) the company continues to explore the upgrading of the win-win chain model, from traders (profit from price spreads) to supply chain integrated services (relying on business advantages to provide value-added services) to the current exploration of becoming an industrial ecological organizer to create a "supply chain +" industrial ecosystem to help customers enhance value and gain industrial value-added at the same time. 2) the company's business structure: supply chain as the main body, finance and high-end industry as two wings, constantly moving forward around the industrial ecology. Revenue structure: supply chain integrated services account for 95%, of which metal materials business accounts for nearly half; gross profit composition: the supply chain contributes 63% of gross profit, of which products metals contribute the largest source of gross profit (21.4%). Financial services and high-end industries together contribute about 1/4 Gross profit margin: in 19 years, the company's overall gross profit margin is 2.7%, supply chain business gross margin is 1.8%, financial services is 18.4%, and high-end industries is 16.8%. In recent years, the rapid growth of financial services and high-end industrial sector can be regarded as an important starting point for companies to build a supply chain + industrial ecosystem.
Case study: 1) the product metal-Hong Kong-Zhuhai-Macao Bridge project embodies the integrated service capability of the company's supply chain by solving the pain points in the upper, middle and lower reaches; 2) the product chemical industry-from Haining warp knitting to Shandong tire, show the company's vertically integrated supply chain thinking and cross-industry replication ability. 3) the rich return obtained by Xindonggang Pharmaceutical Co., Ltd. is a classic case in which the company obtains investment income based on the cultivation of supply chain service value chain; 4) products can operate coal trade and thermal power, and cultivate a reservoir for coal circulation through thermal power projects. practice the integration of trade and industry to hedge the risks of the industry.
Win-win with investors: stable performance growth superimposed dividends. 1) We believe that investors will be expected to enjoy the continued improvement in the company's revenue and profit level. In 2015, the company went public as a whole, and the compound growth rate of income and profit in 16-19 exceeded 18%. In 2019, the total operating income was 358.9 billion yuan, and the net profit was 2.73 billion yuan. The ROE level has been stable at about 12% in the past 16 years and 12.44% in 19 years, reaching a new high. 2) the company's multi-business portfolio flattens the cycle fluctuation. In the past, the market was worried that commodity supply chain companies were affected by economic cycle fluctuations, but we analyzed the large model of products and ironed out cycle fluctuations through multiple business portfolios. it is reflected in: periodic products use self-agency combination, trade and industry combination, domestic and foreign trade combination, current combination and other ironing fluctuations; the combination of different cycle varieties to reduce industry risk; the company to cultivate new main industries to reduce industry fluctuations. In addition, the leader promotes the compound national strategy and industrial trend. 3) investors are expected to enjoy the company's dividend. We observe that traditional commodity supply chain companies such as Jianfa and Xiangyu are paying attention to dividends to help investors enjoy stable dividend returns. The dividend level of Zhongda has been stable in the past three years, with a dividend payout rate of 52.95% in 2019, a dividend of 0.25 yuan per share, and a corresponding dividend rate of 5.52%.
Win-win with the staff, continue to promote mixed reform. After many reforms, the company continues to improve the level of operation and management and stimulate the vitality of the company. At present, it has entered the 3.0 stage of mixed reform, and the subordinate member companies are starting the "second mixed change".
Investment suggestions: 1) We estimate that the net profit attributable to the company in 2020-22 is 25.5,30.2 and 3.3 billion yuan respectively, and the corresponding PE is 8.9,7.5 and 6.8 times respectively. 2) We believe that the market capitalization of the company is undervalued at present.
Comparable companies: the company's three-year average ROE12.2%, is second only to Jianfa's 16.4% (but Jianfa's real estate business contributes more to profits), ahead of Xiangyu and Ruimotong; corresponding to 2019, the company's performance: 8.2 times PE, lower than Xiangyu's 12 times and Ruimotong's 15 times. We believe that the current PB is broken, the PE is less than 9 times, and the dividend yield is more than 5%, which belongs to the target of low valuation and high dividend. 3) Investment suggestion: according to the PB center 1.15 times since the company's listing as a whole, the one-year target price is RMB5.40, which is expected to be 19% higher than the current price, and the corresponding dividend yield is 4.6%. The "recommended" rating is given for the first time.
Risk hint: the economy has fallen sharply and the impact of the epidemic has exceeded expectations.