Zhongying Fund intends to transfer nearly 10% of the equity of the actual controller, strong and strong.
The company announced on the evening of July 29 that Wang Yingyan, one of the company's actual controllers, and Pan Naiyun, vice president, intend to transfer 62.62 million shares (9.27% of the total share capital) and 2.64 million shares (0.39% of the total share capital) to the Hunan Xiangjiang Zhongying Industrial Transformation and upgrading Investment Fund by agreement. The transfer price is 13.5 yuan per share, and the total transfer price is 881 million yuan. After this transfer, Wang Yingyan holds 27.86% of the shares and is still the controlling shareholder, while Wang Yingyan and Xu Jing hold a total of 31.01%. Zhongying Fund will hold 9.68% of the total equity, making it the second largest shareholder. We judge that there is a good synergy between the company and Xiangjiang Group (the parent company of Zhongying Fund) in business, and it is expected to gain new profit growth with the help of its resource advantages in Hunan Province. We expect the company to maintain a "buy" rating of $1.22 for EPS 0.77, 0.99, in 19-21.
Xiangjiang Group, the actual controller of Zhongying Fund, has strong financial strength and obvious geographical advantage.
Zhongying Fund is the capital operation and foreign investment platform of Hunan Xiangjiang New area Development Group Co., Ltd. Xiangjiang Group, with a registered capital of 30 billion yuan, is the largest municipal state-owned enterprise in Changsha. In fact, the controller is the State-owned assets Supervision and Administration Commission of the Changsha Municipal people's Government. Xiangjiang Group co-ordinates the implementation of four major plates: area development plate, urban operation plate, financial services plate, industrial investment plate. Xiangjiang Group has unique resource advantages, and its Xiangjiang New area is located at the junction of the Yangtze River and Beijing-Harbin-Beijing-Guangzhou Line in the "two horizontal and three vertical" strategic planning of national urbanization, and will become a prominent part of radiating the central and western regions and connecting Southeast Asia. it is an important intercommunication node for the joint development of "Belt and Road Initiative" and the Yangtze River economic belt.
The business synergy effect between Xiangjiang Group and the company is obvious.
At present, the company's three major businesses are ecological restoration, ecological travel, and ecological products, which have a good synergistic effect with Xiangjiang Group. The infrastructure construction and land primary and secondary linkage development in the development plate of Xiangjiang Group are in good agreement with the company's municipal / real estate landscape business; the cultural tourism projects in urban tourism operation are compatible with the company's park green space and ecological cultural tourism business; the cultural tourism, energy and environmental protection focused in industrial investment are also consistent with the company's ecological cultural tourism and ecological products. The business of the financial investment sector can also provide companies with diversified financial services and reduce financing costs.
Develop new business and strictly control the volume of PPP
As a late entrant in the garden industry, the company has always been at the forefront of the industry in terms of risk control. The company has been using a scoring system to screen PPP projects since 18 years, and PPP projects that have not passed the risk control system are not allowed to be signed. From 15 years to now, the company has actually participated in the construction of only 4 PPP projects. Over the past 18 years, the company's net operating cash flow has changed from negative to positive, reaching 164 million yuan, ranking first in the garden industry. The company has boldly opened up new businesses in the past 18 years, including the development of mine restoration business, R & D and production of ecological products-Muqu. These businesses are developing well and will become a new growth point for the company's profits.
Expect synergy, steady growth, and maintain a "buy" rating.
Due to the continuous change of the financing environment, we have made fine adjustments to the company's financial expenses. It is estimated that in 19-21, the EPS 0.77 shock will be 1.22 yuan (the original home net profit of 5.1 won will be 812 million). We believe that the company's new business is developing well, mine repair and wood interest are expected to contribute considerable profits, and the cash flow is good. With reference to the company's average PE valuation of 15.99X in 19 years, we approve the granting of 19-20X PE for 19 years, corresponding to a reasonable price range of 14.63-15.4 yuan, maintaining a "buy" rating.
Risk hint: Muqu / mine repair business is not up to expectations, and the business coordination with Zhongying Fund is not up to expectations.