This report is read as follows:
The "implementation opinions on further speeding up the cultivation of Shanghai State-owned multinational corporations" promotes the overseas expansion of the company's auto interior business. It is expected that the global development will be faster than the original plan, and the first time coverage will be given to "increase holdings".
Main points of investment:
We estimate that the company's EPS from 2013 to 2015 will be 0.25,0.31,0.38 yuan respectively. The reform of state-owned enterprises in Shanghai will further improve the company's operation and profitability in the future. Combined with historical valuation, the company will be valued at 50 times PE, with a target price of 15.50 yuan, covering the "overweight" rating for the first time.
The market believes that as the leader of automobile interior decoration, the brands already involved include European, American, Japanese and Korean brands such as Volkswagen, BMW, Toyota, etc., so it is difficult to increase the number of newly developed brands and the share of individual brands in China. We believe that under the circumstances that it is difficult to increase the domestic share, we can still further expand the car interior business (whether it is mergers and acquisitions or self-built factories) by following the whole car factory to build factories overseas, and the car interior business is far from reaching the upper limit.
On January 28, the General Office of the Shanghai Municipal people's Government issued the implementation opinions on further speeding up the cultivation of Shanghai's state-owned multinational corporations, guiding and encouraging the city's state-owned enterprises to seize the opportunity of building a China (Shanghai) free trade pilot zone. take the initiative to participate in the reform of the global economic structure and international industrial restructuring. We believe that it is difficult to increase the share of Shenda shares in the domestic automobile decoration market, and the company is planning to try to open up overseas markets. The landing of this opinion will greatly promote and accelerate the development process of overseas automobile interior decoration business of Shenda shares.
The increase in the share of car interior sales will significantly increase the company's gross profit margin. According to the 2013 semi-annual report of Shenda shares, foreign trade accounted for 67.39% of the company's income in the first half of 2013, 21.72% of domestic trade business and 13.20% of car interior business, with gross profit margins of 6.64%, 3.90% and 13.23%, respectively. We expect that with the company's future overseas business expansion, the proportion of car interior business will increase, which will promote the increase of the company's overall gross profit margin.
Catalyst: overseas mergers and acquisitions, overseas factory construction
Risk hint: no suitable M & A target has been found.
