Event description

The company announced that the original home appliance retail business will be spun off and sold to the related party, Shandong large and medium Electric Appliances, and 94% of the assets will be spun off into inventory home appliances, such as refrigerators, washing machines, televisions, air conditioners, etc., with an estimated price of 138 million yuan, which will be paid in cash. The company's own property will be retained and a housing lease contract with Shandong Dazhong will be signed with an annual amount of 18 million yuan for a lease term of 15 years, rising by 5% every 3 years.

Event analysis and conclusion

Before the end of the year, the company has completely solved the problem of peer competition with the controlling shareholder Gome Group, no longer engaged in home appliance retail business, will make every effort to transform the security smartphone business, and will face the problem of matching its name in the future. and the problem of joining the new management team, and the company has not been able to promote additional issues to raise funds and other capital operations have the potential to break through.

After the acquisition of Dejing Electronics, the company promised performance of 60 million yuan, 80 million yuan and 100 million yuan respectively in 16-18 years, of which the security smartphone ODM part, which is made in cooperation with Spreadtrum, Yuanxin and Hongba, has already had 270 million yuan of orders in September alone, and it is expected that there will be explosive growth next year, which will become the main driving force for the company's performance growth.

Investment rating and valuation

We conservatively forecast that the net profit of Sanlian Trading Company in 16-18 is 70 million yuan, 140 million yuan and 200 million yuan, and the EPS is 0.28,0.55,0.8 yuan. However, great attention should be paid to it. According to industry feedback, the demand of the safe mobile phone industry is expected to be more than one million units in 2017, and the shipping volume of the industry alliance is expected to reach more than 500000 units, which is likely to bring 100-200 million profits to Dejing Electronics, with great flexibility. There is room for profit forecasts to continue to rise in the future. The medium-and long-term target price looks at the market value of 10 billion yuan, the target price is 6 billion yuan, and the corresponding share price is 23.72 yuan.

Risk hint

Safe mobile phone shipments fell short of expectations; Gome's own brand promotion was not as expected.