The policy address announced by the Hong Kong Government last month relaxed the mortgage insurance scheme
The first-time purchase of a property of $8 million or less can be mortgaged at a maximum of 90%. As the first mortgage threshold has been greatly reduced and the low interest rate environment has continued, it is expected that the situation of the first place will be expected to recover after the situation in Hong Kong has stabilized, which will benefit the mortgage mortgage market. On the other hand, the downside risks of the global economy, central banks began to “release water” and also increased their holdings of gold assets. It is expected that the price of gold will rise and fall, which will have a positive impact on the pawn loan business.
The local listing of the (1319) is being hampered by the above factors
The Group’s core mortgage business and the pawn loan are the core businesses of the Group. The core mortgage mortgage business is built on a two-click basis. The mortgaged real estate includes residential properties such as apartments. Village houses and commercial houses (such as parking lots and offices) are provided to individual customers and corporate customers. In addition, the Group currently has 12 pawnshops in Hong Kong and has a pawnbroker licence and a money lender license.
The Group recently announced interim results
As of the end of August this year, interim revenue increased by 5.2% year-on-year to RMB 120 million; profit of approximately HK$59.27 million (the same below) increased by 10.5%, and earnings per share was 3.1 sen, due to mortgage mortgage interest rate since last year. Since the fourth quarter, the net interest margin has also increased by 0.6 percentage points to 12.7% from 12.1% in the same period of 2018. The interim dividend is 1.07 cents, and the dividend payout ratio has increased from 30.7% to 34.5%. Interest income from the interim mortgage loan increased by 2.9% to $81.2 million year-on-year. There were 84 new mortgage loan transactions during the period. There was no bad debts. The valuation ratio of the first mortgage loan was about 49.4%. The value ratio is about 52.6%, which shows that the management of the group has excellent risk management capabilities.
For pawn services, the Group provides a reasonable amount of deposit through professional valuation service assessment. Customers can provide items such as watches, gold and diamonds. Benefiting from the high gold prices, the number of pawn loan transactions and the average loan amount have increased, driving segment revenue to rise by 12.7% year-on-year to 32.9 million yuan.
The Group also plans to launch an online pawn loan platform in the next financial year to provide customers with easier and more efficient ways to obtain loans and rejuvenate pawn loans. While attracting a new generation of customers, it can also promote its business development at a lower cost. . As the property market in Hong Kong is still difficult to predict, the Group continues to adopt a prudent strategy and focus on high net worth customers.
The Group’s two main businesses have growth potential, and the gradual increase in dividend payout ratio will help maximize the interests of shareholders. Recently, the stock price has changed. After breaking through the 250-antenna trend, it is worth paying attention to. The current level is less than 6 times P/E and up to 6% dividend yield. The valuation is very attractive.
The fundamentals of the Group have already been good. The recent liberalization of the building by the Hong Kong Government has further ignited the property market “Xiaoyangchun". The sales of buildings have increased sharply, which is quite favorable to its business. It is time for the current price to be low.