\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 705 Avic Industry-Finance Holdings Co.Ltd(600705) )
Implement the strategic plan of the 14th five year plan and Avic Industry-Finance Holdings Co.Ltd(600705) capital increase network to promote supply chain finance. Recently, Avic Industry-Finance Holdings Co.Ltd(600705) participated in the capital increase of Jinwang company with its own capital of 155 million yuan. After the capital increase, the shareholding ratio of Avic Industry-Finance Holdings Co.Ltd(600705) increased to 22.41%, becoming the largest shareholder of Jinwang. Before the merger and capital increase, it held the equity of Jinwang through its subsidiaries, with a total shareholding ratio of 27.64%. After the capital increase is completed, the golden network is expected to remove the development restriction of insufficient capital, and Avic Industry-Finance Holdings Co.Ltd(600705) is expected to strengthen the integration of aviation industry chain.
Three pain points that have plagued military supply chain financing for a long time. 1) Financing is difficult, and small and medium-sized enterprises and people’s participation in the military industry chain have a large number and small volume. In addition, due to the opaque military related factors in the military industry, there are pain points such as difficult loans and financing; 2) Financing is expensive, and the average financing cost of Chinese small and medium-sized enterprises is generally between 10% and 20%; 3) The funds are in place slowly, and the average fund collection cycle of military enterprises is as long as 8-10 months. In terms of traditional financing, the loan approval process of small and medium-sized enterprises is long and difficult.
The three core businesses of Hangxin platform focus on the pain points of military supply chain development, and realize industry wide expansion services. Gold network is backed by China aviation industry group and focuses on supply chain financial technology services. As the core platform of gold network service, Hangxin platform has deeply cultivated military industry and expanded industry, and built an online supply chain financial service system focusing on three core businesses of “Hangxin” online accounts receivable factoring, military order financing and inventory financing, so as to meet the capital needs of all levels of the supply chain and all stages of production and operation. At present, the service customers cover aviation, aerospace, shipbuilding, electronics, construction, banking, medical treatment, warehousing, logistics, services, government affairs and other fields, and have achieved comprehensive services in major industries of the national economy.
Three advantages to build the core competitiveness of gold network. 1) Relying on AVIC group and giving full play to the advantages of military industry: relying on the advantages of shareholders, deeply cultivate the military supply chain, covering more than 10000 suppliers at all levels of the service industry chain. 2) Join hands with the six major banks to reduce capital costs and improve efficiency: Hangxin is the only platform directly connected with all the six major state-owned banks. Its credit standards match the core suppliers, with the characteristics of low financing cost, fast process and low risk; 3) Create the advantages of “n + N + n” mode, achieve win-win results among three parties, and help small, medium-sized and micro enterprises: with the mature and leading “n (core enterprise) + n (financial institution) + n (upstream and downstream enterprises of the supply chain)” financial technology platform mode, Hangxin platform has achieved the national leading quality and quantity of financial institutions, leading the coverage of service core enterprises and suppliers Military supply chain and leading R & D of financial products.
There is strong demand for policy support, and there is broad space for the military supply chain financial market. 1) In terms of policies, government departments have repeatedly issued documents to promote the development of supply chain finance, directly hit the financing pain points of small, medium-sized and micro enterprises, and the market scale has grown rapidly. 2) In terms of the military industry, the demand for upgrading weapons and equipment accelerated during the 14th Five Year Plan period. Many private enterprises joined the military industry, and the demand for enterprise financing surged. However, equity and main credit financing were constrained by their own size, which made it more difficult, and the prospect of the supply chain financial market was huge.
The strategic synergy is expected to be realized and the economic benefits can be expected. After the capital increase is completed, on the one hand, gold network is expected to form synergy with Avic Industry-Finance Holdings Co.Ltd(600705) ‘s trust, investment, leasing, securities, insurance and other financial business sectors, accelerate the business development of each sector, and better realize the integration of Finance and industry. On the other hand, although gold network is still in the early stage of large-scale investment, it is expected to achieve profit growth through the expansion of business scale and the deepening of product system, so as to contribute considerable investment income to the company.
Investment suggestion: buy – a investment rating. It is estimated that the company’s EPS from 2021 to 2023 will be 0.50 yuan, 0.55 yuan and 0.58 yuan respectively, and the six-month target price will be 5.3 yuan, corresponding to a P / E of 12x in 2021.
Risk warning: performance is lower than expected, policy tightening risk, macroeconomic downside risk and operational risk
