Investment logic
Outreach continues to expand, striving to build the most complete product line in the industry: the company is one of the leading enterprises in the domestic automation instrument industry, and has built the most complete product line in the industry through acquisitions in recent years. From 2012 to 2015, the company acquired Shanghai Xiongfeng, Tianjin Yihuan, Guangzhou Sennashi, and Chengdu Anke Xin, etc., respectively, and strengthened its layout in the field of liquid level meters, flow meters, temperature and pressure instruments, and gas sensors.
Acquiring Enkoxin and entering the field of gas detection: In January 2015, the company plans to buy Chengdu Ankoxin Electronics for 223 million yuan in the form of issuing shares and paying cash, thus entering the promising field of gas sensors and gas detection. Company executives participated in the issuance of 5.57 million additional shares. The three-year lockdown period showed confidence in the company's future development.
Through international cooperation, new growth points will be created in the field of servo systems and machine vision: the new electric servo products developed by the company in collaboration with Aradex (Oders) of Germany began to be supplied in 2015, and the first batch of products was mainly supplied to Fugong Dynamics; it acquired 21.74% of the shares of Scape Technologies A/S in Denmark and set up a joint venture with it to establish a joint venture in China, with a total investment of about 8.12 million yuan to develop the domestic robot application market.
Investment advice
We believe that the company has become one of the few domestic companies with a relatively complete line of industrial automation instruments products through outreach acquisitions. At present, China is in an important stage of transformation and upgrading of the manufacturing industry. Intelligent instruments are the core devices in automated and intelligent transformation, and there is still plenty of room for development in the future. The new fields of servo systems and machine vision that the company is involved in through international cooperation are also the future development direction of the cash manufacturing industry, and the market prospects are broad. Furthermore, the company still has expectations for further extension, and we gave it an “increase in holdings” rating.
valuations
Considering the merger of the acquisition of An Kexin, we predict that the company's main business revenue in 2015-2017 will be 573 million yuan, 672 million yuan, and 781 million yuan respectively, up 70%, 17%, and 16%, respectively; the net profit of Guimu was 57 million yuan, 69 million yuan, and 80 million yuan, up 148%, 22%, and 16%, respectively; EPS was 0.23/0.28/0.32 yuan respectively, and corresponding PE was 96/79/68 times, respectively.
risks
Macroeconomic growth is slowing down again, automation upgrades in downstream industries are slow, and new servo and machine vision businesses are not expanding smoothly.