AVIC Capital (600705)： Rapid growth in leasing and securities revenue, ROE expected to rise gradually
AVIC Capital (600705): Rapid growth in leasing and securities revenue, ROE expected to rise gradually
This report reads: It is expected that the performance of financial subsidiaries will grow steadily in the first quarter, driving the company’s net profit to increase by + 11%, leading to an increase in the profit and loss of minority shareholders, short-term pressure on the growth rate of net profit attributable to mothers, and long-term ROEExpected to pick up.
Investment Highlights: Maintain “Overweight” rating and maintain target price of 7.
The company’s 佛山桑拿网 total operating income for 19Q1 / net profit attributable to its mother was 39.
9 trillion, ten years + 26% / -1%, single quarter return on net assets 2.
77%, in line with our expectations.
It is expected that the performance of various financial subsidiaries will grow steadily in the first quarter, driving a + 11% increase in the company ‘s net profit, leading to a + 48% increase in the profit and loss of minority shareholders, and putting a certain amount of pressure on the growth rate of net profit attributable to mothers in the short term.
Maintain the company’s EPS for 2019-21.
51 yuan, maintaining a target price of 7.
13 yuan, corresponding to 19P / E 18.
3X, P / B 2.
The company has made double-strength efforts in the military industry investment and financial equity layout, and has completed the campaign to promote the improvement of the company’s capital and asset-side competitive advantages. ROE has gradually picked up and increased its holdings.
Revenue from leasing and securities business grew rapidly.
1) The company’s operating income in 19Q1 was 20.
8 ppm (mainly leasing business income), + 42% per year, the growth rate of leasing business income has expanded, and the capital increase effect is obvious.
2) In 19Q1, the program expenses of the company increased by + 37%. It is expected that the stock market situation will better drive AVIC’s securities brokerage business income to achieve rapid growth.
3) Net income from 19Q1 program fees9.
900 million US dollars (mainly income from trust and securities business), at least + 12%, growth rate from negative to positive, and trust business income is expected to keep growing; according to the annual report of the official website of AVIC Trust, the company’s active management scale at the end of 18 years reached 365.7 billion,Early + 25%, the proportion rose to 58%, and the business structure was further optimized, which is the basis for continued growth and profit growth.
Taking the initiative to enhance the strength of the capital end, industry investment has continued to increase.
The company completed the introduction of subsidiaries in 18 years, and participated in heavy-weight war investment such as China Life Insurance and SDIC Fund. The company ‘s future capital strength development has significantly improved; in 2018, the company restructured the two main lines of investment in the military industry and diversification of financial diversity.In terms of external investment, the company is expected to increase in the aviation 无锡夜网 industry and the physical industry in 19 years.
Catalysts: The appointment of strategic investors and the promotion of investment in the military industry continued.
Risk Warning: Regulatory policies cause uncertainty in the trust business.