Private equity fund business has become the company's main business: after Mr. Lin Dongliang, a partner of IDG Capital, became the final controller of the company in 2016, Sichuan Shuangma gradually divested the original cement business and laid out the private equity fund business. At present, nearly 80% of the company's net profit is contributed by private equity fund business. After the company's transformation to a private equity manager, net profit and ROE increased significantly, net profit after deduction increased from 33 million yuan in 2016 to 989 million yuan in 2021, and ROE increased from 1.25% in 2016 to 17.76% in 2021.
Under the "science and technology-industry-finance" cycle, the development of the venture capital industry is accelerated, and the comprehensive registration system accelerates the survival of the fittest of venture capital institutions: scientific and technological innovation requires long-term capital investment, and private equity investment is a relatively matching form of investment with scientific and technological innovation. Since 2020, the withdrawal from the end of the gem, gem registration system, comprehensive registration system have landed one after another, the fund-raising end of the long-term funds continue to open, the venture capital industry is currently in a stage of rapid development. Driven by the comprehensive registration system, the investment method of "rooted industries + empowered enterprises" will replace the previous way of "rapid investment + capital market arbitrage", and the survival of the fittest of venture capital institutions will be further enhanced. the head organization with a sound "fund-raising, management and withdrawal" management system will benefit more.
Sichuan Shuangma is the core beneficiary of the venture capital industry under the comprehensive registration system: the company currently manages 25 billion yuan, mainly in advanced manufacturing, new energy and other hard technology fields. The company's actual controllers and core management are from IDG, the investment team is excellent and stable, and based on years of investment experience to establish a sound "investment management" management system. The two funds established by the company in 2017 (AUM175 billion yuan) have entered the withdrawal period, and micro companies and Aojie Technology in the investment project have been listed. This year, eight companies, including Yitang Semiconductor, Zhiou Technology, Jethydrogen Technology and Guriwatt, are expected to be listed centrally, and investment income and performance compensation are expected to release high performance flexibility. At the same time, the first phase of the second fund has been landed in November 2022, with a subscription scale of 7.5 billion yuan, and the second fund is also expected to land in the near future, with an orderly expansion of management scale.
Investment suggestion: full registration system catalysis + high performance growth rate gradually cashed + new fund gradually landed, there is a large room for improvement in valuation. We expect that the investment income and performance return will account for a relatively high proportion in the income structure of Sichuan Shuangma in 2023. We choose the income structure of overseas head private equity managers to compare with the similar stage of Sichuan Shuangma. The valuation center of overseas private equity managers in the comparable period is about 25 ×. We estimate that the return net profit of the company from 2022 to 2024 will be RMB 13.54 million, an increase of 37%, 46% and 52%, respectively, compared with the same period last year. The current stock price corresponds to 9 × PE in 2023. For the first time, coverage gives an "overweight" rating.
Risk hint: the investment return of private equity funds is lower than expected; the fund-raising scale of new funds is not as expected; cross-market selection of relative valuation reference companies may bring valuation risk.
