Investment Rating - The investment rating for the company is Neutral [5] Core Views - The company is expected to benefit from economic recovery, with its performance stabilizing after a decline in recent years [1][2] - The company's total assets have remained stable around 1.5 trillion yuan, but revenue and net profit have decreased significantly [1][17] - The company’s core business includes non-performing asset management and financial services, with a notable shift towards financial services in recent years [16][44] Summary by Sections Company Overview - The company, China Cinda (01359.HK), is a comprehensive financial group focused on non-performing asset management, with a history dating back to 1999 [12] - It operates through various subsidiaries, including banks, securities, and trust companies, and has a workforce of approximately 14,000 employees [12] Financial Performance - As of mid-2024, the company reported total assets of 1.58 trillion yuan, with operating revenue of 37.4 billion yuan and a net profit of 1.6 billion yuan [1][17] - The return on equity (ROE) was 2% in 2023 and is estimated to drop to around 1% in 2024 [1][22] Non-Performing Asset Management - The non-performing asset management business has returned to its core operations, with a focus on acquisition and operational management of distressed assets [2][26] - The acquisition and operational management segment is expected to stabilize and benefit from economic recovery [2][29] Financial Services - The company has a complete range of financial service licenses, including banking, securities, and trust services [44] - The financial services segment has seen a rising revenue share, contributing significantly to overall income [16][44] Profit Forecast and Valuation - The company’s net profit is projected to be 2.4 billion yuan in 2024, with a significant recovery expected in 2025 and 2026 [3][77] - The estimated price-to-earnings (PE) ratio for the upcoming years is projected to be 18, 11, and 9 for 2024, 2025, and 2026 respectively [3][77] - The reasonable valuation range for the company is estimated to be between 1.27 and 1.62 HKD, indicating a potential premium over the current stock price [3][5]
中国信达：受益经济复苏，业绩筑底-20250220