\u3000\u3000 Polaris Bay Group Co.Ltd(600155) (600155)
Executive summary
Polaris Bay Group Co.Ltd(600155) is a holding platform integrating industrial research, scientific and technological development, investment and financing. The company’s business involves securities, plastic pipe profiles and other fields. Huachuang securities, a wholly-owned subsidiary, is the core asset of the company, and the plastic pipe profiles business accounts for a relatively low proportion of the company’s overall revenue. The ownership structure of the company is relatively scattered. At present, there are no controlling shareholders and actual controllers. The largest shareholder is New Hope Liuhe Co.Ltd(000876) Chemical Investment Co., Ltd. The company has established a relatively flexible system and mechanism, and has successively completed three phases of employee stock ownership plan since 2019, which can fully mobilize the enthusiasm and creativity of employees and promote the sustainable and healthy development of the company.
Huachuang securities is a comprehensive medium-sized securities firm based in Guizhou. At present, Huachuang securities is a wholly-owned subsidiary of Polaris Bay Group Co.Ltd(600155) and contributes more than 99% to the operating revenue and profit of listed companies. Huachuang securities takes Guizhou as its base and service center. By the end of 2020, the number of business departments of the company in Guizhou Province has reached 63%, and the market share in Guizhou Province has exceeded 50%. At the same time, in recent years, the company’s products and services have been continuously extended, and the service mode has gradually covered Yunnan, Sichuan and other places, forming a more obvious regional competitive advantage in the field of retail business. Huachuang securities has a relatively perfect business license. In recent years, the company has actively promoted the transformation of various businesses, gradually built a unique competitive advantage, and formed significant business characteristics in research and institutional business, consignment financial product business, asset management business, bond self investment business and so on. Huachuang securities has a medium scale. Since 2018, the company’s scale and operating performance have achieved steady growth, and the industry ranking of main indicators has made steady progress, especially the industry ranking of operating revenue and net profit. At present, the main business indicators are above the median of the industry.
The company’s asset scale continued to expand and its operating performance grew steadily. Since the acquisition of Huachuang securities in 2016, the asset scale of Polaris Bay Group Co.Ltd(600155) has continued to expand in recent years, and the scale of total assets and net assets have increased year by year. By the end of the third quarter of 2021, the total asset scale of the company was 53.370 billion yuan, an increase of 39.02% compared with the end of 2017, and the scale of net assets was 15.875 billion yuan, an increase of 6.48% compared with the end of 2017. In recent years, the company’s operating performance has grown steadily, and the scale of operating revenue and net profit has increased year by year. In the first three quarters of 2021, Polaris Bay Group Co.Ltd(600155) the company achieved an operating revenue of 2.465 billion yuan, a year-on-year increase of 8.00%, and a net profit attributable to the parent company of 526 million yuan, a year-on-year increase of 15.00%.
Profit forecast and Valuation: it is estimated that Polaris Bay Group Co.Ltd(600155) the operating revenue in 2021 / 2022 / 2023 will be 3.429 billion yuan / 3.556 billion yuan / 3.824 billion yuan respectively, with a year-on-year growth rate of + 9.38% / + 3.70% / + 7.54% respectively. It is estimated that the net profit attributable to the parent company in 2021 / 2022 / 2023 will be 976 million yuan / 1.014 billion yuan / 1.095 billion yuan respectively, with a year-on-year growth rate of + 48.33% / + 3.89% / + 7.99% respectively. At present, the valuation level of Polaris Bay Group Co.Ltd(600155) is at a low position. As of the closing on February 21, 2022, the company’s valuation is 1.06 times Pb (LF), which is far lower than the current average valuation of 1.59 times Pb (LF) in the securities sector. Compared with the historical valuation center of the company in recent five years, Pb (LF) is also significantly lower. From the valuation point of view, the company has a high margin of safety.
Risk warning: A-share market has been significantly adjusted; The company’s 1.5 billion receivables from Beijing Jiayu cannot be recovered; Large scale breach of contract in the company’s stock pledge business; Self operated bond investment; The deterioration of the operation of building materials business is a drag on the performance of listed companies; The company’s securities business and building materials business failed to develop together.
