Incident: The company's stock price fluctuated. The controlling shareholder said that the company issued a stock price change announcement on January 5 for the company's major asset restructuring plan. After verification with management, the production and operation activities of the company and its holding subsidiaries were all normal; after written inquiries with SAIC Motor Group, the controlling shareholder, up to now, the controlling shareholder has not carried out major asset restructuring or other important matters related to the company.
If the company is valued according to segments, the stock price still has a certain margin of safety
We believe that the company can consider segmented valuation: the supercharger business is in a stage of rapid improvement. The PEG valuation method can be applied to the company's participating company Ling Heavy Turbochargers, and the PB valuation method can be used for the rest of the assets. 1. Ling Heavy Turbochargers achieved net profit of 205 million yuan in 2014, 140 million yuan in the first half of 2015. We estimate net profit for the full year of 2015 to be 350 million yuan, and the compound growth rate for 16/17 was 50%. Based on the closing price on January 4, the average PEG value of Shenwan Auto Parts listed companies was 2.61 times, and the median was 1.99 times. According to the 1x PEG valuation, the reasonable value of 40% of Ryoshu's supercharger equity is about 7 billion yuan. 2. The net assets of the company's 2015 mid-year report were 3.465 billion yuan, which was 3.292 billion yuan after excluding the long-term equity investment of 173 million yuan in Ling Chung Turbochargers. The average PB of listed companies in Shenwan's auto parts industry was 7.08 times, the median was 5.54 times. The average PB of Weichai Power, Yunnei Power, Dongan Dynamics, and parts companies under the same large group, Huayu Auto, FAW Fuwei, and Fuao Co., Ltd., which are also part companies of large groups, was 1.88 times. The reasonable value of the company's assets other than Lingzhong superchargers was calculated at about 4.94 billion yuan based on PB1.5 times. The total value of the two parts was about 11.94 billion yuan, while the closing price on January 5 corresponding to the total market value of the company was 15.45 billion yuan.
SAIC Motor is actively seeking transformation. The company is a small company under a large group
SAIC Motor plans to transform emerging fields such as new energy, fuel cells, intelligent driving, vehicle networking, automotive e-commerce, automobile big data, and automobile finance through fixed growth. As a small company under a large group, the company's original medium and heavy diesel engine business has encountered bottlenecks, and the transformation of the group is expected to bring positive changes to the company.
Investment advice
Also, considering the company's transformation, we estimate that the company's EPS in 15-17 was 0.09 yuan, 0.17 yuan, and 0.29 yuan. The growth in performance mainly benefited from the sharp increase in investment income brought about by the rapid increase in the penetration rate of passenger car superchargers, and it is not ruled out that the company may transform and maintain its “buy” rating.
Risk warning
New product sales fell short of expectations; macroeconomic sentiment declined; company transformation fell short of expectations.