GI Ai Technology (300309): the transformation of AMC shines brilliantly

太平洋證券 ·  05/02/2018  · Researches

Summary of the report

After 16-17 years of development, the company has successfully transformed into the asset management industry, and AMC business has become a pillar business. The main driver of the company's growth in the future will also come from the AMC business.

We believe that GI's 17-year profit margin growth is sustainable, not only because of the huge space in the non-performing asset management industry, but also because the company's equity incentive system and strong non-performing asset management capacity will also accelerate the company's transformation and development. Therefore, we are optimistic about the future growth of GI Ai Technology.

Core logic:

To transform the AMC industry, the company transformed its AMC business in 2016. based on its experienced core team and strong and flexible asset management model, the 2017 annual report showed that AMC's new business generated considerable revenue, accounting for 66% of the total revenue, with a net profit of 320 million yuan and a contribution of more than 100%.

Employee shareholding + holding cooperation to build a community of interests the disposal of non-performing assets is a talent-intensive industry, and the professionalism and stability of the business team are essential to the sustainable development of the company. Bind AMC core talent through employee stock ownership plan. General manager Yao Qing (the main person in charge of the company's AMC business) currently owns more than 5.06% of the shares. In addition, through 51% holding, a joint venture with local natural or legal persons to set up asset management subsidiaries to jointly carry out non-performing assets business. In this way, on the one hand, the company can be bundled with local partners; on the other hand, it can quickly expand the scope of its business services.

The oil refining and chemical business is expected to be put into production, and future profits are expected to be expected. The company launched a refining and chemical project with an annual output of 1.2 million tons in Tajikistan in January 2015 and is expected to start production and make a profit in the second quarter of 2018. The profit margin of oil refining and chemical business will be improved.

Profit forecast: the company's 19-year net profit in 2018 is expected to be 464 million yuan / 571 million yuan respectively, covering for the first time, giving the company a "buy" rating with a target price of 35.43 yuan.

Risk hint: AMC business progress is not as expected; refinery project progress is not as expected

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