Investment suggestion
We predict that the EPS of the company from 2017 to 2019 is 0.35,0.45 and 0.55 yuan respectively, and the corresponding PE is 27 times, 21 times and 17 times. The decline of the company's main coal machinery industry narrowed in 2016, and the warming trend is expected to continue. The company accelerates the development of new energy vehicles as the second main business, establishes the development pattern of "creating large in the north and energy in the south", sets up a new energy investment company, and accelerates the industrial layout. With the optimization of the equity structure of Yineng Electronics, we are optimistic about its follow-up asset injection and maintain the company's recommended rating.
Main points of investment
The decline in the coal machinery business has narrowed, and the recovery trend will continue: the company releases its 2016 annual report and a profit distribution plan at the same time. As a leading supplier of coal machinery equipment in China, the market share of shearer and roadheader products are in the forefront of the country. During the reporting period, the supply of coal machinery industry continued to exceed demand, and the company achieved a main business income of 901 million yuan, down 10.54% from the same period last year. Net profit was 95.9022 million yuan, down 24.09% from the same period last year, and the decline of the main industry narrowed. In order to ensure normal operation and long-term development, the company plans to distribute a cash dividend of 0.20 yuan (including tax) to all shareholders for every 10 shares, totaling 12.7312 million yuan. The undistributed profit of 727 million yuan will mainly use R & D investment and supplement the working capital needed for new energy vehicle business. At the end of the reporting period, the company's inventory was 241 million yuan, with an advance payment of 27.8671 million yuan. With customer orders landing one after another, and considering that the industry will usher in a change peak, we are optimistic that the main coal machinery industry will continue to stabilize and pick up.
Set up a new energy investment company to accelerate the industrial layout: during the reporting period, the company actively promoted transformation and upgrading and vigorously developed the business of new energy vehicles, and basically formed the industrial layout of core components such as batteries, motors, electronic controls, charging piles and the operation of new energy vehicles. The company announced on April 22 that it plans to invest 100 million yuan to set up a wholly-owned subsidiary Shanghai Chuangli New Energy Investment Co., Ltd., which will mainly invest in new energy vehicles, intelligent network connected vehicles, batteries and energy storage systems, distributed energy and energy Internet. Considering that the production plant of Hefei Chuangda New Energy Technology Co., Ltd. has been basically renovated, the production line of 200 million Ah new energy electric vehicle battery pack and 100000 new energy electric vehicle motor and controller project production line is about to enter the installation and commissioning stage. The operations of Shanghai Chuangli New Energy Automobile Operation Co., Ltd., Shanxi Chuangli, Xi'an Company and Hefei Sun Company have been launched one after another, and Shanxi Chuangli has now made a profit. We are optimistic that the company will upgrade its new energy business from "industrial chain" to "ecological circle".
Optimizing the equity structure of Yineng Electronics, the follow-up asset injection is worth looking forward to: in October 2016, China Coal Machinery, the company's controlling shareholder, acquired 70.37% of the equity of Yineng Electronics, and the company enjoyed the preferential right to transfer the equity of Yineng Electronics. The company announced on April 22 that in order to further enhance the shareholder strength of Huizhou Yineng Electronics and enhance its financing ability, the controlling shareholder, China Coal Machinery Group, intends to transfer all its shares held by Yineng Electronics to Jusheng Investment, the second largest shareholder (Jusheng Investment is the controlling subsidiary of China Coal Machinery Group holding 50.50%). After the completion of the equity transfer, China Coal Machinery and Jusheng Investment have become the controlling shareholders of Yineng Electronics. The optimization of its ownership structure will be more helpful to enhance the external financing capacity of Yineng Electronics. Yineng Electronics is the leading power battery BMS in China, with a market share of more than 30%, and its main customers are mainstream new energy vehicle manufacturers. It is expected that YiNeng Electronics will be injected in 2017, helping the company to become the most professional third-party PACK+BMS provider.
Risk hint: the demand scale of coal machinery renewal is not as expected; the development of new energy business is not as expected; the subsidy policy of new energy vehicles is adjusted.
