Summary of the report:
High-end coal machinery industry leader, to create the second main business of new energy vehicles. The company is a leading supplier of coal machinery equipment in China, mastering the core technology of high-end coal machinery, and adhering to the product positioning of high technology and high added value.
Under the background of the continuous decline of the domestic coal machinery industry, the company's related business is stable at more than 40% of the high gross profit margin level, while actively seeking change, the rapid layout of the new energy vehicle industry chain to develop the second main business.
Quickly cut into the new energy vehicle industry chain, better than expected performance is worth looking forward to. The company's new energy vehicle business is compact, with an in-depth layout of the whole industry chain of "three power" manufacturing, charging equipment construction and back-end operation:
The company works with AVIC New Energy to set up Hefei Chuangda, the first phase of 200 million Ah battery PACK and 30,000 motors and controllers production line is rapidly landing, the progress of production is expected to exceed expectations, it is expected that after reaching production, it will achieve annual sales income of 1.5 billion yuan, net profit of about 130 million yuan, and has room for further capacity expansion.
The company's controlling shareholder acquires BMS leading 100 million Neng Electronics, which is very likely to inject into the company in the future, enhance the company's competitiveness in the field of power batteries, expand its customers to car companies other than AVIC New Energy, form the industrial coordination of "North Chuangda and Nanyineng", and thicken the company's performance.
The company established a new energy vehicle operation company to promote the evolution of the company's new energy vehicle "industrial chain" to "ecological circle" through the purchase and operation of new energy vehicles and vehicle factories to form a close trade relationship, with profits expected to exceed 10 million yuan in 2016.
Downstream coal bottomed out and rebounded, and the coal machinery industry waited for the spring breeze. Benefiting from the supply-side reform, the rebound in coal prices downstream will lead to a rebound in fixed asset investment in the coal industry, and the continuous improvement of the mechanization rate of the coal industry will provide continuous benefits for the company's coal machinery sales business. At the same time, the company's customer coal machine replacement demand will meet the volume in 2017, and is optimistic about the recovery and growth of the company's coal machine business in the year after next.
Profit forecast and investment rating: we expect the company's operating income from 2016 to 2018 to be 940 million yuan, 2.45 billion yuan and 3.78 billion yuan respectively, the return net profit is 120 million yuan, 220 million yuan and 290 million yuan respectively, the EPS is 0.18,0.34 yuan and 0.45 yuan respectively, the corresponding PE is 58.9,31.7 and 23.9 times, respectively, and the target stock price is 13.4 yuan. For the first time, coverage gives a "highly recommended" rating.
Risk hint: the release of the company's "three power" capacity is lower than expected, the growth rate of the new energy vehicle industry slows down, AVIC's new energy production and sales are lower than expected, and the growth of coal machinery business is lower than expected.