Core viewpoints
The company plans to issue shares to raise funds to acquire Cologne New Energy, the regional leader of batteries, and comprehensively transform the new energy industry. New Taihang Power, a subsidiary of Cologne New Energy, has accumulated deeply in the battery industry. Its predecessor is the state-owned 755 military battery factory, which has three major businesses: lithium batteries, military products and civilian products, among which the company's military business is relatively stable. Lithium battery business and civilian high-speed battery business are in a stage of rapid development. The company's lithium battery, railway battery and military battery revenue are expected to grow by 144%, 51% and 12% respectively in 2015.
The rising prosperity of the new energy vehicle industry has strongly driven the demand for new energy lithium electricity in Cologne. The company's revenue from lithium materials and batteries accounts for 70%. At present, its lithium battery is mainly used for Yutong new energy bus and Xinxiang Xinneng pure electric taxi. With the blowout of downstream demand, we expect the company's lithium battery business to double this year and next year. In the future, the company is expected to continue to expand horizontally in the field of upstream materials, forming a lithium battery industry chain, including lithium battery positive and negative materials, separators, electrolytes and lithium battery production.
The company is a real estate developer and the largest concrete developer in Shenzhen, and traditional industries will provide performance support and cash support for the transformation. The company's concrete business can support a profit of 15 million yuan a year. At the same time, the company has renewal projects in three cities in Shenzhen, real estate projects in Xi'an and Lianyungang, with a saleable area of 450000 square meters, which will help to support the company's performance in the next three years. Real estate projects are highly realizable, and the withdrawal of funds can be used for the needs of transformation.
Financial forecasts and investment suggestions
The company has made a comprehensive transformation of the new energy industry. We predict that the company's EPS from 2015 to 2017 will be 0.46,1.13,1.34 yuan (after dilution). Since Cologne New Energy and Volkswagen New Source cannot be fully merged in 2015, we use the comparable company's 2016 PE valuation as the valuation basis, in which the company's new energy business is comparable to the company's valuation of 41x in 2016, as the company has technical advantages as a ternary material battery manufacturer. We give a 20% valuation premium, that is, 49x, corresponding to the share price of 26.95 yuan. In 2016, the contract energy management business is valued at 30X, corresponding to a share price of 0.90 yuan, concrete business at 17X, with a share price of 1.19 yuan, and real estate at 17X, with a share price of 8.16 yuan. Overall give the company a target price of 37.20 yuan and give a buy rating for the first time.
Risk hint
The profit forecast is higher than the test preparation performance. The acquisition plan still needs to be approved by the shareholders' meeting and the Securities Regulatory Commission. The urban renewal project was not approved by the Land Commission.