AVIC Capital (600705): Leasing Capital Increased Securities Improves Renowned Military Asset Securitization Dividend
Event: AVIC Capital released the 2019 Interim Report on August 28, 2019.
The company achieved total operating revenue of 85 in the first half of 2019.
400 million (YoY + 29%), achieving a net profit of 2.4 billion (YoY + 17%), the net profit attributable to the mother 14.
700 million (YoY-6.
5%). This is partly caused by the subsidiary AVIC’s investment and investment strategy at the end of last year. The company’s shareholding ratio is inclined and its net profit is diluted.
We believe that the company’s important marginal changes are: (1) Capital increase in AVIC Leasing, and the increase in scale has promoted a significant increase in revenue.
In the first half of this year, AVIC Capital and its subsidiaries added USD 2.5 billion in value-added capital to AVIC Leasing. Benefiting from the enhancement of its industrial resources and capital, AVIC Leasing achieved a 54% increase in revenue; (2) AVIC Trust contributed steadily to revenue and AVIC Securities marginal improvement.
In the first half of the year, AVIC Trust; profit increased by 7%, and the company’s management scale increased by 6% compared with the beginning of the year; AVIC Securities benefited from the rebound in the stock market, and net profit increased by 337%.
(3) The ability of industry and finance to continue to improve and enjoy the bonus of securitization of military assets.
The first phase of the aviation industry industry investment fund was launched in May with a total size of 4 billion U.S. dollars (the company invested 600 million U.S. dollars); the company is backed by AVIC Group’s attempt 深圳夜生活 to infringe on the reform dividend of asset securitization of military industrial enterprises and can be mixed and listed in military industrial enterprisesAnd restructuring of scientific research institutes and other aspects to further expand business.
(1) AVIC Leasing: The business scale has expanded and revenue has increased significantly.
Benefiting from the expansion of the leasing business and the enhancement of capital strength, AVIC Leasing achieved operating income of 4.8 billion (YoY + 54%) in the first half of the year, accounting for 56% of total operating income, and a net profit of 8.
700 million (+ 43% YoY).
In order to strengthen its capital strength and asset scale, AVIC Leasing actively promoted capital increase and share expansion last year, and plans to raise US $ 5.1 billion. In the first half 天津夜网 of the year, AVIC Capital has gradually increased its capital increase by 2.5 billion with its subsidiaries.
Benefiting from the enhanced capital strength and rich industrial resources of the aviation industry, the scale of AVIC’s leasing business is committed to maintaining expansion.
(2) AVIC Trust: The management scale increased slightly, and profitability remained stable.
In the first half of 2019, AVIC Trust achieved operating income17.
100 million (YoY + 6%), accounting for 20% of total operating income, and a net profit of 10%.
200 million (YoY + 7%).
As of the first half of 2019, the company’s assets under management reached 6,695 trillion (earlier + 6%); the company took the initiative to manage more than half of the scale, the management ability level industry level, and the overall investment style remained stable.
(3) AVIC Securities: The market has significantly improved and its performance has increased rapidly.
At the beginning of 2019, the trading volume of the stock market rebounded significantly. The Shanghai Stock Exchange Index increased by 19%. The regulatory and operating environment of the securities dealers ushered in a significant improvement. In the first half of the year, AVIC Securities realized operating income.
600 million (YoY + 87%), accounting for 9% of total operating income, and a net profit of 1.
900 million (YOY + 337%); benefiting from a rebound in the market, upward index, increased capital strength, long-term profit growth is expected to maintain high growth.
(4) AVIC Finance: Revenue decreased.
Revenue of AVIC Finance in the first half of 201910.
300 million (YoY-18%), accounting for 12% of total operating income, and a net profit of 3.
900 million (YoY-27%), mainly due to the increase in interest expenses and the decrease in deposit balances.
In the first half of the year, credit asset surplus increased by 6% each year, loan interest income was basically flat, deposit balance was rearranged by 28%, and capital costs increased, leading to an 8% increase in expenditure.
The ability of industry and finance to continue to improve and enjoy the bonus of securitization of military assets.
On May 29, 2019, AVIC Capital and the aviation industry co-sponsored the establishment of the first phase of the aviation industry investment fund.
The fund regulation is set at 40 trillion, and AVIC Capital will contribute 6 trillion.
In the first half of the year, the company has realized foreign equity investment68.
9 trillion, increased capital to the subsidiary by 55 trillion, laid a good foundation for the company’s long-term rapid development, and can better exert the overall synergy effect.
Looking into the future, the company, relying on the reform dividend of AVIC’s potential ownership of military industrial enterprises’ asset securitization, can further expand its business in the areas of mixed military enterprise reform, listing, and scientific research institute reform.
Investment suggestion: Buy-A investment rating, 6-month target price of 6 yuan.
We expect the company’s EPS for 2019-2021 to be 0.
34 yuan, 0.41 yuan, 0.
Risk Warning: Macroeconomic Downside Risk / Operational Risk / Policy Risk