\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 705 Avic Industry-Finance Holdings Co.Ltd(600705) )
Event: the company released the annual report of 2021. In 2021, the company achieved a total operating revenue of 19.084 billion yuan (year-on-year + 4.1%), a net profit attributable to the parent company of 4.471 billion yuan (year-on-year + 36.6%), and a weighted average roe of 0.5% The corresponding EPS is 51.0% per share.
Key investment points
The company’s industrial layout is perfect and the operating performance of its subsidiaries is stable: 1) in 2021, the company achieved a year-on-year total operating revenue of + 4.1% to 19.084 billion yuan, which is due to the growth of the operating performance of its industrial subsidiaries to varying degrees, resulting in a year-on-year operating revenue of + 2.2% to 10.56 billion yuan. In 2021, the company achieved a year-on-year net profit of + 16.1% to 6.117 billion yuan, which is the net profit of the company’s financial business of + 15.5% to 657 million yuan and the net profit of AVIC securities of + 16.9% to 683 million yuan. 2) In 2021, the company realized a year-on-year net profit attributable to the parent company of + 36.6% to 4.471 billion yuan, higher than the increase of the company’s net profit, mainly due to the increase in the fair value of the shares of listed companies held by the company. Overall, the company’s fundamentals are good, and the main financial industry maintains a steady development momentum.
Continue to promote the “financial +” transformation, and the transformation effect is remarkable: 1) since the financial holding platform ushered in the era of strong supervision in 2019, the company took the lead in transformation, upgraded the overall development strategy to the “financial +” strategy, and has achieved results in investment and project establishment in the field of aviation industry relying on the strong industrial background of aviation industry group; In terms of industrial research, the company set up a new industrial research department to integrate the research strength of research institutions such as AVIC securities, strengthen industrial research capacity, improve the research capacity construction in military industry and aviation, and form a deep insight into aviation industry investment and other fields. In 2021, the company achieved aviation industry revenue of 6.274 billion yuan and total profit of 3.292 billion yuan. It is expected that the company’s industrial advantages will continue in the future, contributing to the continuous growth of performance. 3) In 2021, AVIC securities will give full play to its industrial background advantage of being familiar with aviation and military industry, comprehensively expand the depth and breadth of serving the main aviation industry, and provide diversified investment and financing comprehensive financial services for enterprises. In 2021, it was rated as a class a securities firm in the industry and entered the white list of securities firms in the first batch. In 2021, AVIC securities realized an operating revenue of 2.251 billion yuan, a year-on-year increase of + 9.4%.
The investment layout is bold and optimistic about the development prospect: 1) the company always takes the lead in the development process, takes the lead in realizing the full license layout at the beginning of the development of the financial holding platform, and the business of each subsidiary continues to grow steadily; Under the background of strict supervision of the financial holding industry, it has transformed and distributed in industrial investment, achieved high returns, and provided a solid guarantee for the innovative development of the company. 2) The company insists on focusing on the main industries of aviation and military industry, continuously improves the level of comprehensive financial services, implements professional development, concentrates advantageous resources and pursues the leading position in subdivided industries. On the one hand, relying on the 14th five year plan, the military industry has good medium and long-term development prospects and high growth. On the other hand, due to the particularity of the military industry, the investment barrier is high, and the company is backed by the central military enterprises, which has obvious advantages over other industrial investment institutions; At the same time, with the implementation of the comprehensive registration system, the exit channels of the company’s industrial investment will be more perfect, and the release of the company’s future performance is expected to be more rapid.
Profit forecast and investment rating: Avic Industry-Finance Holdings Co.Ltd(600705) as the only financial control platform under AVIC group, the diversified financial layout is deepened. We are optimistic that the company will achieve sustained and steady growth in performance by virtue of its military background and the combination of industry and finance. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 4.727/50.12/5.318 billion respectively, and the current market value corresponds to 7.81/7.37/6.94 times of P / E from 2022 to 2024. With the improvement of industry expectations, the company’s valuation is expected to repair and maintain the “buy” rating.
Risk tips: 1) stricter financial supervision affects the development of the industry; 2) The downward trend of China’s economic development affects the market demand of the leasing industry; 3) The epidemic control was less than expected.
