Main points of investment:
Firm transformation will pay off. The company's traditional business is metallurgical equipment, and its main products are industrial universal shafts, gear couplings and shearing blades. While the traditional industry remains in the doldrums, the company has firmly transformed intelligent manufacturing in the past two years, and finally made a breakthrough this year: the company plans to buy a 100% stake in Suzhou Longyu Electronic equipment Co., Ltd. at a price of 460 million yuan. At the same time, it is proposed to issue no more than 12 million shares to Anhui Taier holding Group Co., Ltd., and Anhui Xintai Investment Co., Ltd. to raise a total of no more than 190 million yuan. Tyre Group and Xintai Investment are the enterprises controlled by Tai Zhengbiao, the actual controller of the company.
Buy Longyu Electronics and cut into Intelligent Electronic Automation: Longyu Electronics is a high-tech enterprise that mainly provides automation supporting services for 3C manufacturing industry. mainly committed to intelligent equipment and solutions, precision assembly fixture and functional test fixture research and development, production and sales. At present, the automatic assembly and testing equipment of Longyu Electronics is mainly used in the production and testing process of consumer electronic products such as smart wearable devices. In the past two years and the first phase, Longyu Electronics's business income from its largest customer, Dafu computer, accounted for 84.16%, 89.39% and 59.79% of Longyu Electronics's total business income, respectively. Dafu computer is the contract factory of a world-famous electronics company A. According to public information, a well-known global electronics company An is Apple Inc. The net profits attributable to the owner of the parent company after deducting non-recurring profits and losses in the consolidated statements of Longyu Electronics, the target company promised by the other party, were 26 million yuan, 41 million yuan and 53 million yuan respectively, totaling 120 million yuan in three years.
The intelligent manufacturing landscape is expected to continue to expand in the future. The company has established the strategic goal of "driving the world and building the future". In the past two years, the company has been firmly on the road of transformation, especially since last year, the group layout project has gradually landed, and the real acceleration of the transformation will focus on the two areas of industrial intelligence and service intelligence, including industrial intelligent systems, industrial robots, 3D printing, industrial software and service robots.
At present, the stock price is attached to the employee shareholding cost, maintain the purchase, the first target price is 25 yuan. If the total share capital of 255 million shares after additional issuance is calculated, we expect that the EPS of the company in 2016, 2017, and 2018 will be 0.25Universe 0.41, 0.59 per share respectively, corresponding to dynamic PE77X, 47X, 32X, the same industry 2016-2018 average valuation level of 79X, 52X, 40X, and Longyu Electronics growth, small market value of listed companies, strong extension expectations, valuation should be higher than the industry average, given 17-year 60X, the first target price of 25 yuan. The comprehensive cost of employee stock ownership is about 20 yuan, maintaining the buy rating.