Main points of investment

Event: according to the mid-2023 report released by Hyde shares, the company's 23H1 achieved revenue of 551 million yuan, an increase of 14.75% over the same period last year, a net profit of 515 million yuan, an increase of 59.45% over the same period last year, and a net profit of 328 million yuan, an increase of 3.51% over the same period last year.

The company's performance maintained a good growth momentum, and non-recurrent profits and losses increased significantly: 2023H1 Hyde shares, relying on its own scientific and technological advantages and shareholders' background advantages, actively explored bad business opportunities for individual loans, adhered to the traditional advantages of institutional plight and asset management, and achieved a breakthrough again. 2023H1's revenue was + 14.75% to 551 million yuan compared with the same period last year, and the net profit was + 59.45% to 515 million yuan, deducting the non-return net profit from + 3.51% to 328 million yuan year-on-year. There is a large gap between the non-return net profit growth and the home net profit, mainly due to 23H1's new fair value change profit and loss of 190 million yuan of investment real estate, driving the company's non-recurrent profit and loss to increase by 3002% to 187 million yuan from 6 million yuan of 22H1.

Non-performing individual loans have come to the fore, and the business potential continues to be realized: 23H1 disclosed the performance of non-performing individual loans for the first time, of which the entrusted asset management business realized 56.47 million yuan in service fee income. The main results are as follows: 1) the scale of non-performing loan business is expanding rapidly. Since the acquisition of Junfeng in Tibet in August 2022, Hyde shares have expanded the territory of individual loan non-performing business in an orderly manner. As of 23H1, the company has successfully won 7 loan non-performing asset packages and accepted 34 institutions to dispose of individual loan non-performing assets. In the face of the blue ocean of the industry, the company plans to manage 100 billion yuan of assets under the non-performing loan settlement service in the next three years, among which entrusted asset management will become the company's main business model in the future. 2) access to the credit information system of the central bank, the disposal efficiency is expected to be improved. In June 2023, with the approval of the Credit Information Center of the Central Bank, Hyde Capital Management, a wholly owned subsidiary of the company, received a reply to carry out the work of accessing the basic database of financial credit information. in the follow-up, it is expected to further enhance the debtor's willingness to repay by updating the debtor's credit information after performance, so as to optimize the efficiency of the company's individual loan non-performing assets disposal.

Institutional distress asset management business has a solid foundation and continues to play the role of performance stabilizer: 1) in the field of energy:

Rely on the industrial background to establish long-term income. Relying on the industrial resource endowment of the shareholder Yongtai Group, the company is involved in a number of troubled energy projects in the way of reorganization, bringing long-term and stable restructuring benefits for the company. As of 23H1, the company's energy distressed assets project balance is 4.97 billion yuan, accounting for about 65% of the company's stock investment balance. 2) in the field of commercial real estate: the stock project runs well. The company locates the distressed commercial real estate projects in economically developed areas and achieves value-added income through asset transformation while obtaining rental income. 23H1 company after full research, low layout, commercial real estate projects to achieve substantial value-added. As of 23H1, the company's commercial real estate distressed assets project balance was 1.123 billion yuan, an increase of 23% over the end of 22 years, accounting for about 15% of the company's stock investment balance. 3) the field of listed companies: the risk of delisting of Helenzhe is thoroughly resolved. On April 20, 2023, Helenzhe formally withdrew the delisting risk warning, and Hyde shares won the first battle to rescue listed companies. At the same time, it also accumulated rich experience in rescuing and improving the quality of listed companies in difficulties. As of 23H1, the balance of the troubled assets project of listed companies is 708 million yuan, accounting for about 9% of the company's stock investment balance.

Profit forecast and investment rating: we maintain the previous profit forecast. It is estimated that the company's homing net profit for 2023-2025 is 11.361571 million RMB, respectively, with a corresponding growth rate of 62.20%, 38.30%, 32.98%, respectively, and for 2023-2025, the EPS is 0.84x1.17x1.55, and the current market capitalization is 15.4911.208.42 times for 2023-2025. We are optimistic that the company will rely on the first-mover advantage of individual loan non-performing business to open up the growth space and maintain the "buy" rating.

Risk tips: 1) the non-performing business development of individual loans is not as expected; 2) strict supervision restrains industry innovation.