Liquid metals: Disruptors of light alloy materials, with broad prospects for industrialization. The official name of liquid metal is amorphous alloy, which has significant advantages in terms of performance, process and cost. It is a next-generation disruptive material that surpasses traditional light alloy varieties such as aluminum, magnesium, and titanium. It has strong applicability in any field where high-strength, high-hardness, light, thin, complex, and bright shapes are required, and commercially-prepared is very cost-effective, and has broad application prospects in 3C, automotive, medical and other fields.
Yian Technology: It has mastered the core technology of liquid metal and has strong industrial integration capabilities. The core competitiveness of Yian Technology lies in technology acquisition, R&D, and industrialization integration of new materials. At present, the company has established a close equity cooperation relationship with the Institute of Metals of the Chinese Academy of Sciences. It has the three core technologies of mass forming process, material composition, and equipment manufacturing. It is the only enterprise in the world that has been able to announce to the outside world that it has the ability to form large blocks of amorphous metals. The technical barriers are high, scarcity is strong, and it has strong industrial integration capabilities.
The actual controller of the company plans to acquire shares in Liquidmetal, a leading global liquid metal company. On the evening of March 13, the company announced that the actual controller, Mr. Li Yangde, intends to take 18% of the shares of Liquidmetal Technologies (“LQMT”) in the United States and sign the relevant cooperation agreement, and is preparing to further increase the holdings to around 46% in the future, taking the opportunity to inject his shares into the listed company.
The company and LQMT complement each other's strengths and have a strong synergistic effect. The advantages of LQMT are mainly patents, sales and brand influence on a global scale, but there are shortcomings in mass molding processes, equipment and raw materials; Yian can input large molding techniques, inexpensive zirconium-based raw materials and mold and equipment preparation and processing technology to greatly reduce its raw materials and equipment costs, fundamentally solve its three major defects, and make full use of LQMT's brand influence and sales channels to rapidly promote large amorphous alloy products to the world, and carry out extensive technical licensing, which is expected to help LQMT achieve profit, LQMT, at the same time Of Small products can also be quickly connected to domestic customers with Yian. Furthermore, with the help of Yian's A-share listing platform, both parties can obtain sufficient financing and capital operation support, and the synergy effect is huge.
Investment advice: “Buy-A” investment rating, target price of 30 yuan for 6 months. We expect the company's revenue growth rates in 2015-2017 to be 10.2%, 69.8%, and 40.6%, respectively, and net profit growth rates of 11.7%, 43.9%, and 45.7%, respectively. Considering the company's rapid performance growth in 2015-2017, its monopoly position and development potential in the field of liquid metals, and its capital operation energy in the field of new materials, we gave the company a “buy-A” rating. The target price was 30 yuan, which is equivalent to the 85x dynamic price-earnings ratio in 2016.
Risk warning: 1) LQMT continues to lose money; 2) the industrialization of liquid metal falls short of expectations; 3) The company's main aluminum and magnesium alloy business performance has not met expectations, and clinical application of medical magnesium alloys has been slower than expected.
