17 May 2022
Rating: BUY
Price Target 12-mth: HK$10.00
Key points:
-Digital financing and industry technology transformation to fuel future growth.The transformation to becoming a digital financing, platform, and industry technology service provider will enable SY Holdings (SY) to become asset-light and fuel future growth.
-Wuxi Guojin acquisition and loan facilitation to fuel growth.The consolidation of Wuxi Guojin enables SY to noticeably expand its factoring assets, which will fuel growth in its digital financing
business. We also expect good progress in its loan facilitation business, with revenue growth at a 62% CAGR in FY21-23F to reach 13% of total revenue.
-NIM to recover in FY22F on improving loan mix. SY’s NIM landed at 6.4% in FY21, impacted by macro uncertainty, where it focused on higher quality clients with impacts from lower interest rates in China. We expect its NIM to recover to the 7% level in FY22F, driven mainly by an improving loan mix with stronger demand from the infrastructure sector.
Valuation:
Our TP is now based on a 2.0x (previously at 2.5x FY22F P/BV) FY22F P/BV, so as to factor in the recent impact from the H-share volatility. The multiple is at 1x standard deviation of its price-to adjusted BV.
WHAT’S NEW
In December 2021, SY strategically invested in Wuxi Guojin Factoring Limited by acquiring an additional 40% shareholding (total reached 80%) in the company. We believe this marks an important step for SY, with the acquisition to potentially create positive synergies in its existing supply chain finance business. At the same time, it is also engaged in strategic cooperation with the Wuxi Economic Development Zone and will explore new growth opportunities in industry technology.
Wuxi Guojin becoming a consolidated entity of SY from the beginning of FY22 while having a factoring asset balance of Rmb3bn implies SY’s total factoring assets would reach nearly Rmb8bn, or +60%, from the beginning of FY22. The substantial expansion in factoring asset scale as well as the ability to leverage on the Wuxi Communication Industry Group, a prominent SOE in Wuxi and shareholder of the remaining shares (20%) in Wuxi Guojin, are expected to help SY generate better economies of scale and secure further funding, given the strengthened relationship with the local SOE.
Overall, we see the strategic acquisition as accretive to earnings and it may potentially lead to an acceleration in SY’s industrial technology service business, which is currently still at an early stage.
Platform-based services progressing well. The adoption of the asset-light business model and expansion of the company’s loan facilitation platform-based services are progressing well. In FY21, the loan facilitation balance increased to Rmb1.6bn, up 83% y-o-y, with platform-based service revenue reaching Rmb48m, up 38% y-o-y, and accounting for 10% of total revenue. Total funding partners for loan facilitation services also expanded to 86, up from 46 in FY20. With the loan facilitation business gaining further track and becoming more matured, along with the consistent policy to promote inclusive financing among the banking community in China, we see good potential for the future growth of SY’s platform-based services.
In particular, SY has cooperated with CCB (939 HK, BUY) and successfully secured a further Rmb2bn credit facility quota (up from Rmb1bn previously) on 11 May to further develop the loan facilitation business. We believe this will help strengthen SY’s franchise among the banking community and, in turn, help it secure more funding partners to fuel further growth in its loan facilitation business. Overall, we expect SY’s platform-based services revenue to grow by a 62% CAGR during FY21-23F, with such revenue reaching 13% of total revenue by FY23F.
Improving outlook with NIM to recover in FY22F.Impacted by macro uncertainties in China, the lowering of interest rates, and the company’s proactive risk control measures to focus more on high-quality clients, we saw a noticeable decline in SY’s NIM in FY21, which landed at 6.4% compared to 8.4% in FY20. In return, its overall NPL ratio and overdue loan ratio improved and reached 0.29% each, down by 31bps and 26bps, respectively. On the other hand, its daily average balance of factoring assets retained its growth trajectory, suggesting healthy demand. Overall, we expect NIM to rebound to the 7% level in FY22F, driven mainly by the improving product mix due to stronger demand in the infrastructure sector, with the segment generating higher loan yield.
Lower TP to HK$10 on lower multiple. BUY with positive outlook ahead. After factoring in FY21’s actual numbers, our FY22F earnings forecast remains unchanged, and we introduce our FY23F forecast. We lower SY’s TP to HK$10 (from HK$11.2) on a lower target multiple of 2x FY22F P/B (previously 2.5x), so as to factor in the recent H-share market volatility. With the positive outlook remaining, we maintain BUY on SY Holdings.
2022年5月17日
評級：買入
目標價12個月：港幣10.00元
要點：
-數字融資和行業技術改造，以推動未來的增長。向數字融資、平臺和行業技術服務提供商的轉型將使SY Holdings(SY)成為輕資產並推動未來增長。
-無錫國金收購和貸款便利化，以推動增長。無錫國金的合併使SY能夠顯著擴大其保理資產，這將推動其數字融資的增長。
公事。我們還預計其貸款便利化業務將取得良好進展，21-23F財年收入年複合增長率為62%，將達到總收入的13%。
-NIM將在22財年恢復，改善貸款結構。受宏觀不確定性的影響，SY的淨資產收益率在21財年降至6.4%，受中國較低利率的影響，該公司專注於更高質量的客户。我們預計其NIM將在22財年恢復到7%的水平，這主要是由於貸款結構的改善和基礎設施行業更強勁的需求。
估值：
我們的TP現在基於2.0x(以前為2.5x FY22F P/BV)FY22F P/BV，以計入最近H股波動的影響。這一倍數是其調整後市盈率的1倍標準差。
有什麼新鮮事嗎
2021年12月，SY通過收購無錫國金保理有限公司40%的股份(總計達到80%)，對該公司進行了戰略投資。我們相信，這標誌着SY邁出了重要的一步，此次收購可能會為其現有的供應鏈金融業務創造積極的協同效應。同時，它還與無錫經濟開發區進行戰略合作，將探索行業技術方面的新增長機會。
無錫國金從22財年初成為SY的合併實體，同時擁有30億元人民幣的保理資產餘額，這意味着SY的總保理資產將從22財年初達到近80億元人民幣，或+60%。保理資產規模的大幅擴張以及無錫通信實業集團的槓桿能力，預計將有助於SY產生更好的規模經濟並獲得更多資金，因為SY與當地國有企業的關係得到了加強。無錫通信實業集團是無錫著名的國有企業，也是無錫國金剩餘股份(20%)的股東。
總體而言，我們認為這項戰略收購將增加收益，它可能會加速SY的工業技術服務業務，目前該業務仍處於早期階段。
基於平臺的服務進展順利。採用輕資產業務模式和擴大公司基於貸款便利化平臺的服務進展順利。21財年，貸款便利餘額增至16億元，同比增長83%，其中基於平臺的服務收入達到4800萬元，同比增長38%，佔總收入的10%。貸款便利化服務的融資合作伙伴總數也從20財年的46個增加到86個。隨着貸款便利化業務的進一步發展和成熟，加上中國在銀行界推動普惠融資的一貫政策，我們看到了SY基於平臺的服務未來的良好增長潛力。
特別是，SY已與建行(939 HK，Buy)合作，並於5月11日成功獲得20億元人民幣的信貸額度(高於此前的10億元人民幣)，以進一步發展貸款便利業務。我們相信，這將有助於加強SY在銀行界的特許經營權，進而幫助它獲得更多的融資合作伙伴，以推動其貸款便利化業務的進一步增長。總體而言，我們預計SY基於平臺的服務收入在21-23財年的年複合增長率將達到62%，到23財年將達到總收入的13%。
與NIM一起改善前景，以期在22財年復甦。受中國的宏觀不確定性、利率下調以及公司更加關注高質量客户的積極風險控制措施的影響，我們看到SY的NIM在21財年顯著下降，從20財年的8.4%下降到6.4%。作為回報，其整體不良貸款率和逾期貸款率均有所改善，分別達到0.29%，分別下降31個基點和26個基點。另一方面，其保理資產的日均餘額保持了增長軌跡，表明需求健康。總體而言，我們預計NIM將在22財年反彈至7%的水平，這主要是由於基礎設施行業需求增強而導致的產品組合改善，該細分市場產生了更高的貸款收益率。
以較低的倍數將TP下調至10港元。以積極的前景買入。在考慮了21財年的實際數字後，我們對22財年的收益預測保持不變，我們引入了23財年的預測。我們將SY的目標市盈率從11.2港元下調至10港元，較低的目標市盈率為2x FY22 F/B(以前為2.5倍)，以計入最近H股市場的波動。在保持積極前景的情況下，我們維持對SY控股的買入。
