Core ideas:
1. Event
Hengshun Zhongzhong plans to acquire 18% stake in Qingdao urban construction lease.
two。 Our analysis and judgment
(1) the leasing business of urban construction is financial leasing
Urban Construction Leasing is a Sino-foreign joint venture financial leasing company established with the examination and approval of Shibei District Commercial Bureau. Rely on the financial leasing service team with rich experience in the financial industry, rely on a wide range of funding sources, through providing customers with professional and efficient financial leasing solutions to obtain rental income and financing consulting income. The main customers are Jilin Railway Investment and Development Co., Ltd., Sichuan Dongxu Electric Power Engineering Co., Ltd., Weihai Nanhai New area Water Co., Ltd., Jinliao Bin Xincheng Development and Construction Co., Ltd., Zhucheng Longxiang Water Group Co., Ltd.
(2) the rapid growth of urban construction leasing business
On March 31, 2016, the book value of assets, liabilities and net assets of urban construction leases were 3.97418 billion yuan, 2.25664 billion yuan and 1.71753 billion yuan, respectively. After the evaluation, the total assets are estimated to be 3.97101 billion yuan, and the book value of net assets is 1.71436 billion yuan. The evaluation price is lower. The net profits of urban construction leases in 2015 and January-March 2016 were 96.73 million yuan and 40.5 million yuan respectively. Net interest rate is 46%. The rapid development of urban construction leasing performance will thicken the profits of listed companies.
(3) the construction of the industrial park is like a tiger adding its wings.
As an excellent private enterprise, Heng Shunzhong is engaged in the construction of new industrial parks in overseas poor countries, which is one of the best models for the implementation of Belt and Road Initiative policy in China. However, limited to private enterprises, there are many constraints in financing. It is speculated that the investment in collaborative urban construction leasing will provide multi-faceted financing for enterprises entering overseas industrial parks in order to solve the financing difficulties. The financing of overseas industrial parks will also enhance the performance of urban construction leasing companies. Create a win-win situation.
3. Investment suggestion
Judging the absorption of urban construction leases will help to provide financing services for enterprises entering the Hengshun Zhongli Industrial Park, speed up the construction of the industrial park, and have high cooperation. It is estimated that the company's return net profit from 2016 to 2017 is 5.23 yuan and 947 million yuan respectively, corresponding to 20 and 11 times price-to-earnings ratio. Considering that the company is rich in overseas coal and high-quality laterite nickel reserves, and the nickel mine has begun to generate revenue, the nickel price is expected to be low, the company still has a net interest rate of about 20%. The current low price of nickel is up 15%. Maintain the company's recommended rating.
4. Risk hint
Delisting risk; overseas political risk; slow progress of park construction