The capital operation of the group has accelerated, and the injection of electronic countermeasures assets is expected to be strong: the pace of asset restructuring of China Electronic Information Group has obviously speeded up, and trading of Great Wall computer and Great Wall Information has been suspended. The company's shareholder, China Electric Panda Group, is the main scientific research and production base of China's air-to-air intelligence radar, shore-based and shipborne warning radar and the backbone enterprise of national military electronic countermeasure equipment. We believe that Nanjing Panda is most likely to obtain military radio communication countermeasure equipment assets injected into Handa Technology, as well as Changjiang Electronics and Coreda's military electronic equipment assets. these companies are the backbone enterprises in the national military electronic countermeasures field, with a high gold content, with revenue and net profit of 72% and 23% of Nanjing Panda in 2014, respectively.
Neglected industrial automation equipment strong: the company is a domestic enterprise with high-end core technology in the field of industrial robots and automation equipment, and has invested in industrial robots, automatic transmission equipment and automatic filling equipment projects in November 2012. At present, TFT-LCD purification plant system, SMT surface mount production line system, automatic packaging system, electric vehicle automatic battery replacement system, wafer crystal automatic sorting system, welding system solution, robot and so on have achieved large-scale development, among which LCD-TFT purification plant equipment system and national smart grid electric vehicle automatic power station exchange system are listed as major projects.
Other business multi-point layout, waiting to blossom: rail transit equipment company is the AFC leader to benefit from the spring tide of rail construction; communications equipment and products company vigorously develop military mobile communications and Internet of things solutions; consumer electronics company is a digital audio products veteran enterprises with profound technology accumulation; electronics manufacturing company's hardware facilities conditions are superior, actively transform into a comprehensive EMS enterprise.
Investment advice: (1) the company's existing business revenue is growing steadily, with a year-on-year increase of 40.7% in 2014, a compound growth rate of 19.81% in the past two years, and a continuous improvement in gross margin. Without taking into account asset injection, the company's EPS from 2015 to 2017 is expected to be 0.22, 0.25, 0.32 yuan, respectively, and the corresponding PE is 81-70-54 times. (2) give 40 times PE to the company's existing business, corresponding to a reasonable market capitalization of 9.14 billion yuan in 2016. (3) with reference to the average PE of electronic countermeasures comparable companies on the motherboard, the reasonable market value of the potential injected assets is 39.8 billion yuan. After deducting the part that has been reflected in the current market value, the market value of the company still has 180% room for improvement. Therefore, we give the company a "buy-A" investment rating with a 6-month target price of 30 yuan.
Risk tips: the group injected more safety into military assets than expected; LCD panel production line construction progress or robot market development was lower than expected; rail transit investment slowed; consumer electronics and electronics manufacturing orders fell sharply; and so on.
