Main points of investment:
Leading real estate companies enter the automobile field in an all-round way
1) the company belongs to the holding enterprise of Silver billion Group, one of the top 500 enterprises in China, and its business scope covers real estate development, sales agency, business management, property management, star hotel, high-end manufacturing and other fields. it has formed a complete product line of high-end housing, urban apartments, Class An offices and urban complexes. In 2016, the company's real estate-related revenue was 8.057 billion yuan, and the net profit returned to its mother was 514 million yuan. 2) in 2016, the company comprehensively implemented strategic transformation and upgrading, determined the development pattern of two-wheel drive with "real estate + high-end manufacturing", and entered the automobile field in an all-round way relying on Ningbo's solid foundation for the development of auto parts.
American ARC Group is a multinational enterprise specializing in R & D, design, production and sales of gas generators. Its products are used in automotive airbag systems. It is the second largest independent manufacturer of gas generators in the world, with production bases in the United States, Mexico, Macedonia and Xi'an, China. The main customers include parts giants such as Otto Liv, Tianhe, Takata, Bride, Hyundai Mobis and Toyota Synthesis. 2) in January 2017, the company completed the merger and acquisition of ARC assets and the transfer of ownership. According to the transaction report, the net profit commitment of this transaction in 2017UniUniverse 2019 is not less than 1.68max 2.62 / 326 million yuan respectively. 3) according to the forecast of GIA, the global sales of airbags will reach 555 million pieces in 2020, of which 149 million pieces will be sold in China. The company predicts that the output from 2017 to 2020 will reach 4717.85pm 5526.59max 6295.63 / 67.7392 million pieces. Based on the calculation of RMB 55 per piece, the revenue is expected to reach RMB 25.95pm 30.40pm 34.63 / 3.726 billion, which shows good prospects for development. 4) We believe that the company has successfully achieved the layout of the auto parts field through the acquisition of ARC, and is expected to accelerate the performance of the auto business while expanding the global market share of ARC by promoting the expansion of ARC's business in China.
Bunch Group is a world-renowned independent manufacturer of automatic transmission, with two production bases (Belgium and Nanjing, China) and one R & D center (Netherlands) in three countries. Its products are mainly CVT (continuously variable Transmission). And is committed to the development of DCT (double clutch transmission), hybrid assembly system and pure electric powertrain system, customers are mainly independent brands, including Geely, Dongfeng (including Xiaokang and Liuqi), Changfeng cheetah, seahorse, southeast and Proton, etc., the production capacity is expected to reach 1.25 million units in 2017. 2) bunch's current main products are VT2 and VT3, and the maximum input torque is 190/220N.m. The new product VT5 torque will reach 250N.m and is expected to be mass produced in 2018, which will help the company to expand the mid-and high-end passenger car and SUV market. 3) according to the transaction report, the net profit of this transaction in 2018 and 2019 is not less than RMB 7.52 / 1.118 billion. We believe that, compared with the gearbox enterprises under the main engine factory, independent third-party gearbox manufacturers have strong cost control advantages. With the continuous improvement of automatic gearbox penetration and the launch of the company's new products, the company's gearbox business is expected to accelerate development.
Profit forecast, covering "overweight" rating for the first time
We believe that the company, as a leading real estate company, has established a two-wheel drive development pattern of "real estate + high-end manufacturing". Through the acquisition of ARC and bunch, it is recommended to speed up the layout of airbag gas generators and automatic gearboxes with broad development prospects. Considering the consolidated table of ARC, we estimate that in 2017-19, the company will achieve operating income of 112.14max 121.21 / 12.97 billion, an increase of 39%, 8% and 7%, and a net profit of 7.65%, 8.10 / 958 million, and an increase of 49%, 6%, 18%, corresponding to an EPS of 0.25, 0.26, 0.31 per share, respectively. If you take into account Bunky merge Table, it is estimated that the EPS is 0.50 Universe 0.56 Universe 0.68 yuan per share, the first time to cover the "overweight" rating.
Risk tips: major customer sales decline risk; real estate business decline risk; bunch acquisition progress is not as expected; ARC China business is not as expected; raw materials rise risk.