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    Jiangsu Guoxin: Trust's Steady Development

    2019-03-14 07:28:17

    Tintin takes you to play with finance

    The trust has developed steadily, and the quarterly report exceeded expectations.

    event:The company announced the 2018 performance report, achieving a total operating income of 22.135 billion yuan in 2018, an increase of 9.56% year-on-year; net profit attributable to shareholders of the parent company was 2.626 billion yuan, an increase of 20.46%. At the same time, the company disclosed the first quarter results forecast for 2019, and it is estimated that the net profit of the mother will be +136%~158% yoy to 1.05 billion yuan to 1.15 billion yuan.

    Investment points

    1,The company's 2018 results were in line with expectations and the trust's performance grew steadily:

    Jiangsu Trust as the company's main source of profit, achieving 2018 revenue from +18.5% to 2.371 billion yuan (including net fee and commission income +10.1% to 1.103 billion yuan, investment income +28.8% yoy to 1.283 billion yuan), net Profits were +21.7% year-on-year to 1.967 billion yuan. As of the end of June 2018, Jiangsu Trust's entrusted assets under management were -15.73% to 464.46 billion yuan (including compressed channel business of 91.57 billion yuan to 87.18%, and active management business of 4.886 billion yuan to 12.82%). The assets were +38.76% from the beginning of the year to 18.378 billion yuan. We judged that the company actively optimized the business structure, and reduced the scale of the channel while improving the active management ability to improve the trust rate.

    2The company's 2019 quarterly report exceeded expectations, and it is expected to pick up with the improvement of the trust.:

    1) Jiangsu Trust became the largest shareholder of Lian Life Insurance. The company has used the equity method to recognise income since January 30, 2019. It is expected to increase the net profit of Jiangsu Trust in the first quarter of 2019 by approximately 690 million yuan, affecting the net profit of the returning mother of approximately 560 million. yuan. Excluding this impact, the company reported a profit of about 4.9 to 590 million yuan in the first quarter, an increase of 10% to 33%. 2) With the slowdown of the deleveraging rhythm, the trend of the trust scale continues to converge gradually. According to the monthly data of the trust trust network collection trust, the new scale of the collective trust in February was +13% to 109.8 billion, with the margin of regulatory policy environment. Loose, the formation of the company's wealth management team is completed, the trust is expected to maintain growth.

    3. The trust industry is welcoming marginal improvement. The company's trust + energy dual main industry is expected to work together.:

    1) The new rules and regulations for the second half of 2018 will be issued, the scope of application will be clearly defined, the pace of de-leverage will be slowed down, and transaction management trusts will be treated differently, avoiding a one-size-fits-all approach, the industry will ushered in regulatory marginal easing, and the pressure on liquidity risks will be alleviated. 2) The company completed the fixed increase in 2018 and increased the capital of Jiangsu Trust with a net fundraising of RMB 3.96 billion. The company's capital strength enhancement is expected to promote steady growth. 3) Jiangsu Trust can strongly support the development of energy business (including the provision of financing services, wealth management and financial advisory services). The energy business can create new demands and opportunities for the development of trust business. The trust + energy dual main industry is expected to bring into play the combination of industry and finance. Advantages, resource sharing, and synergy.

    Earnings forecast and investment rating:

    The trust industry ushered in regulatory marginal easing and liquidity improvement after the new rules of asset management came to the fore. The company's transformational active management and wealth management team expanded smoothly, and the increase in the rate of return drove the steady growth of the trust performance. At the same time, the performance of the power sector is expected to improve. The company is expected to play a synergy with the trust and energy as the dual main business. We expect the company's net profit in 2018 and 2019 to be 26.26 and 3.177 billion yuan respectively, maintaining the “Buy” rating.

    risk warning:

    1) The scale of the trust under the new regulations of the asset management is down; 2) The power system reform affects the thermal power production and business model; 3) The integration of the trust and energy dual main industry is less than expected.

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    Editor in charge: Lu Shan RF10057

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