The industry is in a bad mood, and its performance continues to decline. Feng-shaped shares of the original main alloy casting ball section of the research and development and production and marketing, is the domestic wear-resistant material leader. In recent years, due to the loss of production capacity and inventory in downstream mines, cement and other industries, customer demand has shrunk, the company's main business has continued to decline, and profits have been negative for many years in a row.
Seek new opportunities and cut into the field of auto parts. The steady growth of the domestic automobile industry and the expansion of independent brand leaders have brought opportunities for growth and growth for local parts and components enterprises. Based on this, in order to get rid of the decline of the traditional main business, the company actively carried out industrial mergers and acquisitions and cut into the field of auto parts.
It is proposed to increase 1.1 billion yuan to acquire majestic Seiko. The company plans to raise no more than 1.1 billion yuan to acquire 100% equity of Wuxi Xiongwei Seiko. The main car body system seat parts, body accessories, including seat framework, airbags and other related stamping parts, rich in application scenarios, and benefit from the trend of lightweight vehicles, products have room for continuous upgrading.
Product quality customers are stable, performance shows confidence in gambling, and is expected to significantly increase performance. Majestic Seiko has advanced technology and mature technology, supplying stamping products to many global mainstream parts leaders, such as Yanfeng Johnson and Foggia, and ploughing the global supply chain for many years. It is a leader in subdivision, effectively ensuring the company's long-term profitability. At the same time, the company has reached an agreement with Xiongwei Seiko to achieve a net profit of not less than 115 million yuan and 125 million yuan respectively in 2016 and 2017, and a cumulative commitment of no less than 375 million yuan in 2016 and 2018, demonstrating confidence.
Profit forecast and investment advice. It is estimated that the EPS from 2016 to 2018 will be 0.25,0.17,0.15 (based on the original business), corresponding to the closing price PE of 216,319,373 times on October 20, 2016. Assuming that the merger and acquisition of majestic Seiko is completed in 2017, the performance target is achieved and the table is consolidated for the whole year, the exam preparation profit is estimated to be 140.11 million yuan in 2017. With reference to the A-share non-ferrous metal materials, auto parts and other related targets, and with reference to the comparable company's dynamic PE range in 2017, which is 54 times and 74 times respectively, considering the decline of the company's original main business and the subdivision leading attributes of M & A targets, it gives the company's main business and M & A business 20 times and 55 times PE valuation respectively in 2017, and gives the target market value 7.177 billion yuan for the first time. Assuming that the fixed increase is completed at the base price in 2017, the total share capital of the exam preparation is expected to be 120 million shares, with a market capitalization corresponding to the target price of 59.65 yuan, with a "overweight" rating for the first time.
Risk hint. The progress of epitaxial mergers and acquisitions is lower than expected. The performance of the acquisition target was lower than expected. The main business continues to deteriorate.
