AVIC Capital (600705): First coverage report: Military + financial scarce specimens benefit from military-civilian integration + industry-finance integration trust securities leases are improving

AVIC Capital (600705): First coverage report: Military + financial scarce specimens benefit from military-civilian integration + industry-finance integration trust securities leases are improving

AVIC Capital is the only financial holding listed company controlled by China Aviation Industry Corporation.

The company holds trust, lease, futures, securities, and finance company licenses through the “Integrated Finance” platform (AVIC Investment).

In addition, AVIC has established Beijing Rongfu Aviation Industry Fund, Huihua Fund, etc., and holds fund licenses.

At the same time, in order to improve the layout of the full financial license, he participated in the establishment of AMC (Chengdu Yihang Asset Management Co., Ltd.).

Under the industrial investment platform, the company invested in a series of high-quality development industry projects through AVIC Xinxing (established in 2012), AVIC Aviation Investment (established in 2013), and the Aviation Industry Fund, making full use of the strong military background, development, industrial resources andBrand advantages, closely surrounding the various industrial chain of the aviation industry, actively explore aviation industry investment, focus on the development of strategic emerging industries, and look for growth points outside the aviation industry.

The company finally perfected the full layout of financial licenses, and at the same time deeply integrated industrial industries and financial resources.

Industrial demand supports the growth of capital, 杭州夜网论坛 and support from shareholders also inputs abundant resources to finance; at the same time, a complete business license meets this capitalization demand of the industry, and capital business optimization can also feed back the healthy development of the industry.

“Military industry + finance” formed a good interactive cycle.

As a scarce A-share target of military industry + finance, the company will become the primary benefit target of military securitization and military-civilian integration.

In 2018, the company’s operating performance continued to grow.

The company’s net profit attributable to its mother was 31 in 2018.

66 trillion, +13 for ten years.

74%; 2012-2018 composite strength 27.

94%.

2018 weighted ROE12.

90% in December 2017.

A solid growth was achieved on the basis of 33%.

Leasing, trust and finance business are the top three major sources of income for the company.

In 2018, the lease, trust, finance, and securities accounted for 51 of the company’s revenue structure.

66%, 21.

59%, 16.

86%, 6.

09%; lease, trust, finance, and securities account for 31%, 35%, 20%, and 4% of the profit structure, and the contribution rate of trust to profits.

Among the business segments, trust companies have the largest gross profit margins and the strongest profitability.

AVIC Trust has enhanced its proactive management capabilities and driven its performance to increase, and is a major contributor to the Group’s profits.

Among the 68 trust companies, AVIC Trust has strong innovation and design capabilities. It has issued the first products of various trusts in the market. The business returns are good and ROE is at the leading level in the industry.

In terms of leasing companies, the background of aviation leasing + industrial integration has obvious advantages.

AVIC Securities plans to increase its capital, and the future is expected to improve.

In terms of industrial investment, the project reserves are abundant, and it is not ruled out that the exit can be achieved through capital markets such as the science and technology board, and the future will be rich.

Overall perspective: The company’s sustainable operating performance continues to grow.

The capital increase of trusts and leases has been completed, and the capital increase plan of securities has been formed, and the capital strength of each business has been further enhanced.

The profitability of the trust is at the forefront of the industry. Leasing has the absolute advantage of the aviation business. The securities business is expected to be optimistic. The financial company has strengthened capital management and its performance is optimistic.

In addition, the increase in shareholders’ holdings and the date of war investment highlights long-term optimistic expectations.

“Military + Finance” business synergy is good.

According to AVIC Capital’s profit realization in 2018 and the capital strength of each business line, we use segment estimates for the trust and PB valuation for the remaining businesses, with a corresponding target price of 8.

68 yuan, 49 compared with the current price.

14% increase, the first coverage “Buy” rating!

Risk Tips: Market and Operational Risks, Financial Risks, Management Risks