A pioneer in state-owned enterprise reform, combining staff reduction and efficiency and product structure optimization
The company is a pioneer in personnel reform in state-owned enterprises. On the basis of stable main business, the company seized the opportunity of high industry prosperity in 2009 and achieved personnel optimization. 2012 was only 21% of the number of employees in 1995 and 62% of the number of employees in 2007, while the per capita output value in 2012 was 1,321,000 yuan, 13.8 times that of 1995, 1.4 times that of 2007. The company is the listed company in the automobile industry with the most obvious workforce reduction and efficiency reform. Furthermore, as the company entered SAIC at the end of 2007, the product strategy and company strategy were further clarified, the product line was improved through low-cost investment, and it is expected that the institutional dividends of state-owned enterprise reform will be shared in the future.
Fundraising products have entered a period of growth, and the company's overall competitiveness has improved markedly
The three new engine products of the company's 12-year fixed increase project have greatly enriched the company's product line, while the group's internal support model can reduce the cost rate during the period. The R series engines are mainly supplied with SAIC Chase. In January 2014, Chase sold 1,179 units, an increase of 23.7% over the previous year. Recently, our grassroots research has learned that the company's E-series heavy engines with a displacement of 10-12L have entered the promotion stage in small batches and may become the main driving force for SAIC's heavy truck sector in the future.
A pioneer in energy saving and emission reduction, Ling Heavy Turbochargers is growing explosively
The supercharger industry is an industrialized, low-cost energy saving and emission reduction technology. It entered a period of rapid growth in 2013. The penetration rate in June increased by 8 percentage points compared to January '12, and the penetration rate of the passenger car industry nearly doubled. The company holds 40% of the shares in Ling Heavy Turbocharger. As sales rise, the investment income of Ling Heavy Turbochargers is expected to explode.
Investment advice
The company is the vanguard of state-owned enterprise reform and the beneficiary of energy saving and emission reduction. We expect the company's EPS to be 0.24 yuan, 0.29 yuan, and 0.46 yuan in 13-15 years, corresponding to the current stock price PE of 45.2 times, 37.7 times, and 24.0 times, respectively, maintaining a “prudent increase in holdings” rating.
Risk warning
The company's risk mainly comes from the long climbing cycle of new products; the decline in macroeconomic sentiment.