Events.

Recently, the share price of Jifeng agricultural machinery has been fully adjusted, which has fallen by nearly 50% from the highest point of the stock price, and the investment value is prominent.

Main points of investment.

1. Clear attitude: "Internet +" strategic transformation.

At the shareholders' meeting in May 2015, the company made it clear that it would start the "Internet +" initiative combined with its original business, focusing on exploring the flagship store construction project model, accelerating the cultivation of financial services business platforms (financial leasing, guarantee, internal banks, etc.), accelerating the development of e-commerce business, focusing on small and medium-sized general agricultural machinery products and spare parts products, and cultivating model cooperatives and cooperative cooperative platforms.

two。 Early action: according to the operation idea of platform companies, e-commerce, information and instant messaging platforms have been built.

The company began to seek the road of transformation in 2013, has taken a series of actions combined with the Internet, and has improved the layout in all aspects according to the operating ideas of platform companies:

(1) E-commerce platform. In April 2014, the company launched Jifeng Tesco Mall, the first online trading platform for the agricultural machinery industry in China, adopting the business model of online order and offline physical store distribution, and at the same time adding some pure market-oriented products to strengthen operation capability. rely on the existing logistics system to conduct online transactions directly

(2) Information platform. In May 2015, the company established Nongjihui Agricultural Science and Technology Co., Ltd., focusing on the development of agricultural technology extension services, agricultural machinery services, agricultural information inquiry services and so on. In the same month, the company officially launched the operation of Nongjihui information platform, bringing together various application sub-platforms to form a comprehensive agricultural service platform, relying on the company's offline physical stores, dealers and other network advantages, to form an open and mutual assistance comprehensive information platform for agriculture, rural areas and farmers, to create an agricultural ecosystem.

(3) instant messaging platform. In May 2015, Nongjihui reached a strategic agreement with Chengdu Chuangzhiyun Technology Co., Ltd. to jointly develop the cloud-based Nongjihui integrated service platform Beidou application APP project. With the help of the existing cloud platform and Beidou navigation system of Chuangzhi Cloud Technology, the company will give full play to the advantages of industrial resources, promote the construction of agricultural information service ecological chain and dig deep development of the industry.

3. Future action: rely on the industrial fund to further layout "Internet +".

In 2013, the company and Jiuding Investment jointly initiated the establishment of Sannong Jiuding M & A Fund as a platform for M & An integration of the company's industry. Sannong Jiuding M & A Fund is the first M & A fund established in the agricultural machinery circulation industry, which mainly focuses on agricultural machinery circulation enterprises and related enterprise projects as the main investment direction to attract social financial capital into the agricultural machinery circulation industry. promote the further development of agricultural machinery circulation industry and open up new financial instruments and capital channels. We judge that the industrial fund will mainly invest in the agricultural machinery "Internet +" project. Under the demonstration effect, the company may carry out extension business development by setting up more industrial funds.

4. Acquisitions provide performance protection and get rid of the risk of losses for two consecutive years in 2013 and 2014, especially a loss of 363 million yuan in 2014, an increase of 151.86% over the previous year. The company has taken a series of measures to avoid the risk of further losses this year:

(1) divestiture of loss-making assets. At present, the company has spun off the construction machinery business that has led to successive losses. After the divestiture, the company has realized the optimization of the background, the reduction of personnel costs and the optimization of stock. The company has turned losses into profits in the first quarter of this year.

(2) acquisition of Jilin Kangda. In April 2015, the company announced plans to acquire an 85% stake in Jilin Kangda, with net profits of 28.4255 million yuan in 2013 and 30.2708 million yuan in 2014. The company's net profit after deducting non-recurring profits and losses from 2015 to 2017 is expected to be 24.88 million yuan, 25.11 million yuan and 25.13 million yuan respectively.

(3) acquisition of Ningxia Jifeng. In April 2015, the company announced the acquisition of 41% stake in Ningxia Jifeng. According to the gambling agreement, Ningxia Jifeng's non-net profit in 2015 is not less than 9.6 million yuan, and the cumulative non-net profit from 2015 to 2017 is not less than 29.4 million yuan.

5. Profit forecast: the reasonable market capitalization of Standard Nuopxin Company is more than 20 billion, upgraded to "highly recommended" rating in the secondary market, we think that the company is most comparable to the company, the company is mainly engaged in the production and sales of prenatal agricultural materials, and Jifeng agricultural machinery is mainly engaged in the sales of prenatal production tools. Since the beginning of 2015, Nuopxin's market capitalization has increased from 6 billion to 21.3 billion, an increase of 255%, with a maximum market capitalization of 28.6 billion yuan.

At present, the market value of Jifeng agricultural machinery is 5.7 billion, which has a lot of room to rise, so we upgrade the company to "highly recommended rating".

It is estimated that the company's revenue from 2015 to 2017 will be 37.2 peg 42.1 / 4.78 billion yuan, and the net profit will be 1788 pep 3332 / 44.97 million RMB, corresponding to the EPS of 0.05 peg 0.09 peg 0.13 yuan.

The risk indicates that the transformation of "Internet +" failed, the land transfer was lower than expected, and the sales of agricultural machinery were depressed.