Main points of investment:
It is proposed to accept S to buy 1.6% of the largest domestic lithium battery company. Xinke material announced on the evening of March 5: it plans to use its own capital of 120 million yuan to acquire 1.6% of Tianjin Lishen, owned by Guangzhou Tangji. Tianjin Lishen now has an annual production capacity of 500 million Ah lithium-ion batteries and accounts for 14% of the lithium battery market in 2012. It is the largest domestic lithium battery manufacturer. The purpose of this acquisition is to cultivate new profit growth points in the future.
The purchase price is reasonable. The proposed purchase consideration corresponds to Tianjin Lishen 2012 PE46 times. In 2012, Tianjin Lishen returned home net profit of 162 million yuan, calculated on the basis of 1.6% equity and 120 million acquisition price, corresponding to 46 times PE; PB valuation is 1.9 times, the overall purchase price is reasonable.
The road to corporate transformation may continue to deepen. We believe that although the company's proposed acquisition of shares is relatively small and has a limited impact on the company's main copper processing industry, it reflects that the company is actively seeking change and transformation in new industrial areas, which is of great significance. We expect that the road to transformation may continue. (for the positioning of the main industry, see the report "gradual implementation of the transition to high-end copper processing materials" (20140124)) l was upgraded to increase its holdings. We maintain the performance forecast: from 2013 to 2015, the EPS is-0.08, 0.07, 0.13 yuan, respectively, with a growth rate of-588%, 183%, and 101%. We believe that in view of the high-end positioning of the traditional main business and the extension of new industries, we have raised the PE in 2014 from 109x to 122x (up by 12%), with a compound growth rate of more than 130% from 2014 to 2015, with a PE/G of less than 1, and the corresponding share price is 8.54 yuan (up 12%). Space 17%, upgraded to overweight rating.
Catalyst: the pace of strategic transformation of the company continues to accelerate.
Risk: the potential unsuccessful risk of this acquisition; the performance pressure is still great after the fund-raising project is put into production.