This report introduces the major investment issues of Jiuding, the development and future situation of the PE industry, and the business situation of Kunwu Jiuding. Relying on the advantages of a professional investment and research system, a deep project development system, and a parallel exit mechanism, the company grasps future gold development opportunities in the PE industry, and has unlimited potential and investment value. The company's reasonable valuation is 73.8 billion yuan, corresponding to the target price of 45.14 yuan, corresponding to 40% growth space.
After three consecutive hits, Zhongjiang Real Estate made a splendid investment in Jiuding, becoming the first PE stock in China.
By purchasing 100% of the shares of Zhongjiang Group, Jiuding Group obtained control of the listed company Zhongjiang Real Estate; through asset restructuring, Kunwu Jiuding, the core of the group's PE business, was injected into the listed company to form a model of parallel development of PE business and real estate business. During the same period, it plans to achieve accelerated expansion through fixed increases through fixed increases. Through the operation of a series of capital markets, it achieved amazing performance in 2015, relying on the financial platform advantages of Jiuding Group's large asset management. Through the platform of the listed company, future development can be expected.
Taking advantage of the policy trend, the PE business ushered in a golden period of development. A series of policy orientations such as “mass innovation, mass entrepreneurship”, state-owned enterprise reform and supply-side reforms to promote industrial mergers and acquisitions directly benefit the PE industry; with the approach of Shenzhen-Hong Kong Stock Connect, the implementation of the new three-board stratification system, and the smooth introduction of the future registration system, China's multi-level capital market system will be more complete and the exit channels of PE institutions will be broadened. The improvement of exit efficiency and channel diversification will have a strong booster effect on the growth of the company's performance in the short and medium term, injecting strong impetus into the company's performance growth. The industry as a whole is expected to usher in a new round of rapid development in the future.
The retirement of mature fundraising management is leading the industry. The wholly-owned subsidiary Kunwu Jiuding won the “Top 10 Private Equity Investors in China” for seven consecutive years, and has always been at the forefront of the PE industry. The company's highlights are: (1) the capital side has a financing system that covers all types of channels; (2) a project development and investment team covering the whole industry across the country and even across borders; (3) experienced risk control systems and a complete risk control system and a complete merger and restructuring, New Third Board listing, and IPO parallel exit method to build an assembly line PE factory belonging to Jiuding. The payout scale of Jiuding Private Equity Fund, the comprehensive IRR, amount of projects under management, and comprehensive IRR of the withdrawn projects were all higher than those of its peers. The outstanding performance was mainly due to the company's advanced management system, young and bold management, and efficient investment team. Based on the core view, we predict that the company's net profit from 2016 to 2018 will be 831 million yuan, 1,334 million yuan, and 2,010 million yuan respectively; EPS will be 0.48 yuan, 0.76 yuan, and 1.15 yuan respectively. Considering the company's rapid growth and industry leader potential, the target price for the first stage was 45.14 yuan, corresponding to a market capitalization of 73.8 billion yuan, with 40% upward space.
Risk warning: The progress of the fixed increase plan is lower than expected, policy risks