Jiangsu Leasing (600901): High bargaining power of scarce gold lease targets creates high ROE

Jiangsu Leasing (600901): High bargaining power of scarce gold lease targets creates high ROE

Investment Highlights: As the first batch of domestic financial leasing companies, the shareholders of the company have a strong background.

Jiangsu Leasing Co., Ltd. was established in 1985 and has been approved to become one of the earliest professional financial leasing companies in China. In 2018, the company first listed on the Shanghai Stock Exchange’s publicly issued shares, becoming the first and currently the only domestic listed financial leasing target.

The actual controller of the company is the State-owned Assets Supervision and Administration Commission of Jiangsu Province, and the controlling shareholder is Jiangsu Communications Holdings, a wholly-owned subsidiary of the State-owned Assets Supervision and Administration Commission. Jiangsu Traffic Control still holds it after the issuance.

0% equity; at the same time the company further hires strategic investors to achieve equity diversification and jointly assist the company’s business development.

  Driven by the “transformation + growth” dual-chain, the company is based on small and medium-sized customers and delves into subdivided fields.

The company adheres to the market positioning of “serving small and medium-sized businesses and serving people’s livelihood”. The income of small and medium-sized customers accounts for about 90%. The service areas include public utilities, medical care, education, industrial manufacturing, agricultural machinery, and so on.

In terms of geographical layout, the company is based in Jiangsu Province, and its connectivity business is actively expanding outside the province, especially in the central and western regions. The proportion of revenue from leasing business in Jiangsu Province from 35 in 2014.

7% fell to 14 in 18 years.

3%, business expansion in other provinces gradually strengthened.

  Market-oriented reform of the company’s salary system and the establishment of a high-quality talent team.

In 2016, the company further deepened the market-oriented reform of the salary system. The company’s per capita salary is much higher than the average income of the financial industry in the same region, and there is market competition. The company has formed a corresponding high-quality talent team.The ratio is over 99%, and the proportion of employees with a master’s degree or above is over 60%.

  Debt side: diversified financing channels and good credit background, the company’s capital cost has advantages.

The company merged financing tools such as interbank borrowing, financial debt, asset securitization, and asset support plans to provide more diversified choices on the capital side; the main source of funding was the borrowed funds, which accounted for 71 of the company’s total financing channels in 2018.

8%.

Scoring with peer companies, the company’s cost of capital is lower than Global Healthcare and close to Far East Horizon, so the company’s financing costs generally show a downward trend.

  Asset side: adjust the industry structure to weaken the cycle attributes and strictly control the increase of asset quality.

Based on the business philosophy of “adjusting the structure and controlling risks”, the company actively lays out businesses in weak-cycle industries to balance and reduce the impact of strong-cycle businesses such as manufacturing. In 2018, the revenue from leasing business in the medical and water conservancy industry accounted for 32.

3% vs. 42.

8%.

The short-term company’s non-performing financial lease asset ratio decreased from 0 in 2016.

96% dropped to 0 in 18 years.

79%; meanwhile, the provision coverage ratio has increased significantly, from 289 in 2014.

4% to 432 in 18 years.

7%, highlighting the company’s stable operating style.

  Company characteristics Small and medium customers bring high bargaining and high profitability.

From the perspective of the trend, the growth rate of the company’s main business gross profit margin is relatively consistent with that of its peers. Compared with comparable companies in the industry, the company’s main business gross profit margin has basically maintained at more than 50%, which is much higher than the industry average.Positioned for small and medium-sized customers, it can expand its bargaining power and drive the company to maintain an expanded and stable profitability.

  Investment suggestion: Give “overweight” rating for the first time, and target 19-2 for PB.

5 times.

The company’s core competitiveness lies in: 1) the scarce financial leasing target, diversified financing channels can stably offset the end, reduce capital costs and controllable risks; 2) high ROE and high stability performance, which can deeply cultivate small and medium customers and companiesThe bargaining power in different fields can eliminate the company’s strict cost control, improve operating efficiency and provide competitive compensation.

It is estimated that the highest growth rate of the company’s net profit in 2019-21 will be 22 respectively.

5%, 26返回码: 500 网站打不开?重查.

9% and 25.

3%, giving the company a target PB of 2-2 in 2019.

5 times.

  Risk warning: interest rate rises rapidly leading to narrowing of interest spreads, local and regional risk outbreaks, and regulatory uncertainty