This report is read as follows:
This is the second recommended variety of King Transportation "Transformation 2017", which focuses on the medium-term risk and return in the coming year. With a market capitalization of 4.5 billion, the company provides flexibility in the direction of transformation, but it is only suitable for investors with high risk preferences.
Main points of investment:
The transition direction provides rising options, covering the target price of 15.20 yuan for the first time. Considering that the growth of the company's main business has encountered some bottlenecks, it is predicted that the net profit of the company in 2016-18 is 0.73 billion yuan, respectively, and the corresponding EPS is 0.19 billion 0.20 yuan respectively. However, considering the flexibility of valuation in the direction of transformation, with reference to small market capitalization logistics companies PE and PB, the target price is 15.20 yuan, covering for the first time and rating "overweight".
The attribute of warehousing and logistics industry gives birth to transformation. Feilida was regarded as a growth value stock when it went public in 2008, and its profit increased by 200% in 2011-12. When we first covered it five years later, its net profit in 2015 was more than half lower than it was three years ago. We believe that the decline is not due to poor management, but to the natural instability of IT warehousing and logistics, the life cycle of the infrastructure business, and the decline in marginal returns brought about by remote expansion. The objective environment has given birth to the transformation.
Feilida with venture capital gene. Most transformations fail because of cross-border strategic and business management capabilities. Mr. Shen, chairman of the board, has worked for Kunshan people's Bank and Kunshan Trust since 1979, and founded Feilida, the former leader of Kunshan Venture Capital Holdings, with a financial background even exceeding that of logistics. The company planned a major asset restructuring in 2015, which was terminated. The company announced in May that the three major shareholders plan to reduce their holdings in the same proportion within six months, which also aroused our attention to the company.
The development of high-quality second-line express enterprises series. The market generally believes that the listing of "three links" and "Yida" announces that e-commerce express is becoming an oligarch. And we think that the competition of e-commerce express delivery is only from chess to the middle market, and the pattern is not stable. Individual high-quality second-line express delivery will be supported by industrial capital to maintain a faster growth rate than the industry. Feilida indirectly participates in premium express A through Dingyue, which locates large parcels with 2-100kg, seizing the niche of e-commerce express extending to the manufacturing supply chain. Whether we can participate in refinancing in the future will affect the development of the capital series.
Risk factors. Traditional business decline risk; investment judgment and control risk in new areas.
