Comments:
The underlying assets are of high quality and large scale for the domestic leading automobile internal and external accessories.
1) Chaoda equipment is a leading supplier of automotive internal and external decoration moulds in China, mainly engaged in the R & D, production and sales of automotive internal and external decoration moulds, automobile inspection tools and interior automatic tooling equipment. In 2015, the operating income was 242 million yuan, and the net profit of yoy+12.88%, was 47.2685 million yuan. Yoy+40.74%, grew rapidly, and the net interest rate was 19.52%, which was significantly higher than that of the company. 2) We believe that, with the help of this M & A, on the one hand, the company can extend from automobile panel moulds to the field of internal and external decoration moulds, which will help to enhance the future growth space and improve the overall profitability; on the other hand, Chaoda equipment customers are mainly domestic and foreign mainstream automobile internal and external decoration companies, and the company is mainly mainstream vehicle customers, which can produce good customer synergy, which is conducive to the rapid development of both sides' business. 3) the performance commitment of the underlying assets is that the net profit of deducting non-return from 2016 to 2018 is not less than 5750 USD 6600 / 75.7 million, corresponding to 13 times PE in 2017. Considering the high quality and large scale of the underlying asset customers, we believe that the valuation is more reasonable.
Keep earnings forecasts and ratings unchanged
As M & A matters still need to be approved, we will not consider M & An assets for the time being and keep the profit forecast unchanged: the company's EPS in 2016-18 is expected to be 0.22, 0.29, 0.40 yuan per share, corresponding to 25 times the 2017 PE, maintaining the "overweight" rating. The weak cycle target of the automobile industry, the order on hand is still sufficient, and the export will continue to grow rapidly in the future. the long-term strategic goal is to become the new "flagship" of the world automobile mold industry with complete facilities, strong technical strength and complete industrial chain.
Risk hints: domestic and export mold business growth is lower than expected; cost growth is higher than expected; convertible bond project production progress is lower than expected; M & An integration risk; exchange rate risk.