Leading comprehensive leasing+industrial operation platform. The company's core business model is financial leasing and industrial operation. As of 23H1, revenue accounts for 60.4% and 37.5%, respectively. According to Leasing Alliance data, as of the end of 23Q3, Yuandong Leasing's registered capital ranked ninth among national financial leasing companies.
Financial leasing mainly invests in utilities and has strong interest spread management capabilities. (1) Interest-bearing assets are mainly utilities. The share of traditional healthcare, education and other industries declined, and utilities, construction and other industries continued to receive additional allocations. As of 23H1, the utilities sector accounted for 45% of interest-bearing assets. Asset investment in the utility sector complements “short-term loans” for utility companies. The asset period is basically 1-2 years. Due to flexible loan methods, the yield is high. (2) The net interest spread management ability is strong and consistent over a long period of time. In the review history, the company maintained a steady increase in net interest spread through ABS by selling low-yield interest-bearing assets, increasing the share of high-end customers, and flexible allocation of domestic and foreign debt, from 1.2% in 2015 to 3.8% in 23H1. As of 23H1, nearly 60% of the company's liabilities are current liabilities. The assets and liabilities have been closely matched for a long time, and the company has strengthened asset quality management, and the net interest spread has remained at a relatively stable level.
Industrial operations are mainly equipment and hospital operations. (1) Although the growth rate has slowed, the market share is stable and leading. In 19-22, the growth rate of equipment operating revenue was 30-60%, and due to fluctuations in the economic environment, 23H1, the year-on-year growth rate fell to 18%, but the advanced market share level, still high utilization rate, and excellent leasing scenarios for engineering equipment may maintain a stable growth rate in this sector. (2) Accelerate asset-light development. Platform service revenue accounts for less than 10% of equipment operations, but the growth rate is relatively fast. (3) Optimization of hospital operation structure. The number of hospitals has been reduced, and the number of beds and sector revenue have stabilized in the past 2-3 years.
Profit forecasting and investment advice. The company optimized its asset layout, and the asset growth rate declined and dividend payout ratio increased in '22. As of 1/22/24, the dividend rate (TTM) was 8.6%. Net profit to mother is expected to increase by 2% year on year in '24, and EPS is 1.47 yuan. Referring to the comparable company situation, the Financial Services Division was given 4xPE and the Equipment Operation Division 10xPE, and the reasonable value of the company was obtained at HK$8.1 (according to the Segment Valuation Method), maintaining the “Overweight” rating.
Risk warning. Decrease in yield on interest-bearing assets, rise in non-performing assets, economic fluctuations and policy risks, etc.