Guoyuan reported that it focused on Yuanzheng Technology (08196-HK) for the first time and gave a buy rating, giving it a target price of HK $2.60 according to PE valuation, equivalent to 15 times PE in 2010.
The report points out that the number of cars in China continues to grow at a high speed, and the potential of the automobile aftermarket is huge. In recent years, China's automobile market is in a period of rapid development, and the growth rate of automobile sales is amazing. The number of cars in the country was 49.75 million in 2008, reached more than 63 million in 2009, and is expected to reach 75 million by the end of this year. According to conservative estimates, the number of vehicles owned in China will reach about 490 million in the future. According to international saying, the profit generated by the rear market of the car, compared with the relative former market, is about 7:3. In other words, in the whole automobile industry chain, the profit generated by the rear market is at least twice as much as that of the former market. According to the current development of China's automobile market, there is a huge room for profit growth in the automobile aftermarket. Yuanzheng insists on scientific and technological innovation, has a number of independent intellectual property rights, more than 100 national patents and copyright, has a number of research and development test bases at home and abroad, has the world's largest decoder research and development team, and key software enterprises in national planning and layout. and won Shenzhen Science and Technology Progress Award for many times. The high-tech industrial park with hundreds of millions of yuan invested by the company has been put into use in September 2006. it is one of the core technology research bases in the global automotive aftermarket. The continuous development of new product research and development has formed the company's world-leading core technology advantage in automobile diagnosis, testing and other fields.
Guoyuan forecasts a net profit of 24.8% for the next three years, and an annual operating income of 28.2% for the company in the next three years, reaching 975 million yuan in 2010. Net profit rose from 62 million in 2009 to 120 million in 2012.
Yuanzheng Technology rose 1.10% to HK $1.84 on Tuesday.
