Zhongguancun Technology Leasing disclosed 1H22 performance, in line with profit expectations. The company's 1H22 achieved a total operating income of 363 million yuan, an increase of 18% over the same period last year, of which interest income was 300 million yuan, accounting for 82% of the total revenue; the mother net profit was 110 million yuan, an increase of 16% over the same period last year. Total assets at the end of 1H22 were 9.5 billion yuan, net assets were 2.11 billion yuan; annualized ROE 10.8%.

The leasing business has developed steadily, and the intellectual property financing business has grown rapidly. 1H22's net loans and receivables were 9.024 billion yuan, up 3% from the end of 21; interest-bearing assets were 8.87 billion yuan, up 16% from the same period last year; the company increased its business layout in the smart manufacturing, smart hardware and new energy vehicle industry chain, promoting the sinking of customers, and invested 3.21 billion yuan in new financial leases, an increase of 24% over the same period last year. Since 21 years, the company has made great efforts in product innovation. 1H22 has invested a total of 69 intellectual property financing projects, which is 2.38 times that of the whole of 21 years; the amount of intellectual property financing investment is 515 million yuan, 2.34 times that of 21 years; and the interest income of intellectual property leasing is 12.24 million yuan, accounting for 73% of the interest income.

The rental and investment linkage continues to make efforts, and the stock option business is further expanded. 1H22 has signed 27 new stock option projects (VS 2021 12), the stock option pool continues to expand, and the first phase of the rental-investment fund is progressing smoothly, with delivery of 20 million yuan (VS 2021 95 million yuan) in the first half of the year, and the first phase of the fund (size 200 million) invests in 16 projects. The scale of the second phase of the rental and investment linkage fund is 1 billion, and the first phase of 500 million yuan has been completed, focusing on strategic emerging industries such as advanced manufacturing, new generation information technology, and life science and technology. at present, there are 8 reserve projects, with an investment amount of more than 200 million yuan.

The quality of assets was stable, and the net interest margin and net interest margin increased compared with the same period last year. 1H22's normal assets accounted for 95% of loans and receivables, basically the same as at the beginning of the year; the rate of non-performing assets was 1.6%, an increase of 0.1pct over the same period last year, and provision coverage continued to increase to 183%, an increase of 11pct over the same period last year. The average rate of return on 1H22's interest-bearing assets is 6.7%, which is stable compared with 1H21; the cost rate of borrowing interest expenses has dropped from 4.4% of 1H21 to 4.1%; the net interest margin and net interest margin are 2.5% / YoY+0.2pct and 3.7% / YoY+0.1pct; respectively; while the rate of return on interest income remains stable, the cost rate of borrowing interest expenses has declined, and the premium ability of the company's financial leasing business has steadily improved.

Optimize the structure of assets and liabilities and actively carry out financing cost management. The company's dependence on related party funds continues to decrease, with 1H22 accounting for 12% of the loan balance, down 9pct from the same period last year; commercial bank loans are still the company's main source of capital, accounting for 46%; and asset-backed securities account for 42% of the loan balance, up 21pct from the same period last year. On August 10, the company and CITIC Construction Investment successfully established the "CITIC Construction Investment-Zhongguancun Science and Technology Leasing Phase 1 intellectual property Asset support Special Plan (specialized and innovative) in 2022", with an issue size of 107 million yuan. The comprehensive coupon rate is as low as 2.86% (setting a new issue record).

In the future, we are committed to optimizing and expanding the customer base, focusing on intelligent manufacturing with the combination of industry and finance. 1H22 has added 162 new financial leasing customers and 268 new lease contracts, including 27 stock options. In the future, the company will build an ecological closed loop of business model around "leasing and investment linkage, credit rating, and combination of industry and finance"; through the "city partner" model, it will deeply cover science and technology start-up enterprises in the country's core economic zone, expand and optimize the number of customers; 1H22 will recruit city partners in Shenzhen, Hangzhou and Suzhou; and "combination of industry and finance" will focus on intelligent manufacturing and intelligent hardware, grow and deepen the financial value chain, and optimize profit structure.

Investment analysis advice: maintain earnings forecasts and buy ratings. The company's PB valuation is in the 8% percentile since listing, the subdivision leader of deep ploughing technology and new economy financial leasing, national policy-oriented support, and optimistic industry prospects. There is a poor expectation of medium-and long-term fundamentals, the stock option business has high growth potential, and the company's ROE is expected to rise further, leading to valuation repair. We forecast that the net profit of 22-24e homing is 2.53,3.37 and 446 million yuan respectively, an increase of 29%, 33% and 33% over the same period last year, and the corresponding share price PB is 0.36,0.33,0.29 times respectively.

Risk tips: regulatory uncertainty in technology and new economy industries and financial leasing industry; customer expansion is less than expected; global epidemic situation is repeated.