Connie Electromechanical (603111) Commentary on Major Issues: Release Date Bailout Fund Management Pushes Back on Track
Core point of view The company retains the bailout fund, which is expected to spin off Longxin Technology and bring its business back on track.
The company’s main business orders were full, and orders in hand increased by 28 at the end of 2018.
At 6%, new energy vehicles and other businesses were advanced smoothly to ensure growth.
Update the company’s 2019/20/21 net profit forecast to 3.
30,000 yuan, the current price corresponds to 16 times PE in 2019, maintain the “Buy” rating.
Dating the bailout fund, Long Xin entered the replacement process.
The company announced that it intends to sell 100% of Longxin Technology to Nanjing Zijin Guancui Private Enterprise Bailout Development Fund Partnership (Limited Partnership) for a consideration of US $ 400 million.
After the completion of the equity transfer, if the transferee (bailout fund) subsequently disposes of the income of Longxin Technology below US $ 400 million, the disposal income will be fully returned to it.Owned by listed companies and 10% by bailout development funds.
At the same time, the company’s 12 shareholders and shareholders agreed to hold 4353.
550,000 shares provide pledge guarantees for the relief fund. If the subsequent disposal income is less than US $ 400 million, the above pledged stocks shall be used to compensate the difference in the relief fund.
The plan still needs to be voted by the shareholders meeting.
Risk exposure is sufficient and the company’s operations are expected to return to normal.
The company’s net profit attributable to its mother in 2018 was -31.
500 million US dollars, which includes the provision of large estimated debts and bad debts for Longxin Technology10.
67 trillion, provision for impairment of goodwill22.
7.1 billion yuan.
Excluding the impact of Longxin Technology, the company achieved net profit attributable to mothers in 20182.
83 ppm, an increase of 15 in ten years.
In 1Q1, the company’s revenue and net profit growth rate were +4.
1% and -38.
4%, of which if we exclude the impact of Long Xin, we estimate that the main business profit growth rate may be about 50%.
Details of the forthcoming Longxin plan are yet to be announced, but the risk subject has been released. If the transaction can be completed as scheduled, Longxin Technology will no longer consolidate and the company is expected to survive the difficult period caused by the acquisition.
Rail transit’s main business orders are full, and the main business 杭州桑拿网 development remains stable.
The company’s urban rail door system market share of 50% + has been maintained for more than 10 years, and the overall external car market share of the motor vehicle has also exceeded 50%. The gross profit margin is maintained stable through independent research and development substitution and fine control, and the main industry competitiveness is outstanding.
From 2019 to 2020, domestic railways and subways are expected to usher in the peak traffic, until the end of 2018 the company has orders 37 in hand.
1 ppm, an increase of 28 in ten years.
6%, ensuring high certainty of the company’s main business growth.
The company’s new energy vehicle parts and traditional automobile castings and forgings have also advanced smoothly.
Risk factors: Long Xin’s reduction in progress is less 杭州桑拿 than expected; domestic railway or subway construction progress is less than expected; the company’s product gross margin declines; new energy automobile parts or traditional automobile castings and forgings have grown less than expected.
Investment suggestion: If the impact of Long Xin is not considered, the company’s main business has developed steadily in the past two years. This time the company is dating a bailout fund. If it successfully replaces Long Xin, its overall operation is expected to return to normal.
Taking into account the impact of Longxin’s operating changes, we lower the company’s 2019/20 net profit forecast to 3.
800 million (previous forecast 7).
200 million), new net profit forecast for 20214.30,000 yuan, corresponding to 2019/20/21 EPS is 0.
43 yuan, the current price corresponds to 16 times PE in 2019, maintaining the company’s “Buy” rating.