Events:
The company announced that it is proposed to set up Tianqi Mould North America Co., Ltd. to acquire all the assets and businesses of DieTech, a North American high-quality mold manufacturer, with a total price of no more than US $33 million, corresponding to about 13 times the estimated value in 2016, funded by its own funds and bank loans.
Comments:
Acquisition of mold quality target, steady progress in overseas layout: DieTech is a leading mold manufacturer in the industry, with advanced equipment manufacturing level and industry-leading production technology level, can produce large-scale blanking moulds, can meet customers' needs for complex and diversified mold debugging, and provide complete solutions for customers' final acceptance services. With advanced technology, for GM, Ford, Chrysler and other mainstream cars in the United States, as well as other European and Asian manufacturers, and is the strategic supplier of General Motors Co. In 2016, DieTech achieved revenue of 144 million yuan and net profit of 17.29 million yuan, and promised to invest US $7 million in 2017 to buy four Schuler stamping machines to further expand production scale.
The cooperation of M & An is remarkable, and the global layout is beginning to bear fruit: the company set up an European subsidiary in 2013 and acquired some of the high-quality assets of GIW Mould Company of Germany to open up the European market. However, due to the lack of business coordination between domestic companies and German subsidiaries in the implementation of individual large orders, German subsidiaries lost 12.99 million yuan in 2016. at present, this unfavorable factor has been basically eliminated, and it is expected to reverse losses in 17 years. The acquisition of DieTech, a North American mold company, has a significant synergy, which will help the company to expand its business in the North American market and undertake more mold business orders from GM, Ford, Tesla, Inc. and other international well-known automobile mainframe factories. And is expected to improve the company's mold technology level and brand awareness, to achieve the company's global strategic layout.
Investment suggestion
Based on the mold, actively extend the industrial chain, the layout of emerging industries, performance valuation is expected to improve. It is estimated that the EPS of the company from 2017 to 2019 is 0.24,0.30,0.37 yuan respectively. Buy rating, 6-month target price of 10 yuan.
Risk Tips:
The number of new car development is lower than expected; overseas business expansion is not as expected.