Brief comment on performance
Lucky Film announcement signed the "Xinxiang Zhongke Technology Co., Ltd. Equity transfer Framework Agreement" with Xinxiang Zhongsheng Industrial Co., Ltd. on July 20, 2017. It is proposed to use cash to acquire the equity of Xinxiang Zhongke Science and Technology Co., Ltd. ("Zhongke Science and Technology"), which is wholly owned by the transferor. After the completion of the acquisition, China Science and Technology will become a controlling subsidiary of the company.
Business analysis
Endogenous epitaxial omni-directional layout, lithium battery diaphragm business collaboration is broad: the company's acquisition of China Science and Technology is one of the earliest domestic enterprises engaged in lithium battery diaphragm research and development, production and sales, with mature dry and wet lithium battery diaphragm production process and capacity layout. According to the statistics of China Industry Information Network, China Science and Technology has a 5% share of the global lithium battery diaphragm market in 2016, ranking eighth in the industry and the highest among all domestic brands. At present, China Science and Technology has a total of 15 production lines of various lithium battery diaphragms with a production capacity of 220 million square meters, 13 coating lines with a production capacity of 80 million square meters, and a total production capacity of more than 5 times that of all listed companies under construction. At the same time, the production capacity of lithium battery diaphragm of China Science and Technology is mainly dry production, and the merger of the target company will effectively make up for the lack of production capacity of listed companies in dry production line and coating line, and improve the omni-directional layout of listed companies in lithium battery diaphragm industry.
The new business is booming, strongly supporting the company's performance: since 2011, the company has vigorously developed photovoltaic, lithium electronics and other emerging industries and spun off the original film business, and is gradually forming three major business layouts of image materials, photovoltaic materials and lithium battery materials. The construction of the fourth phase of the company's solar cell backplane project is progressing smoothly, Line 8 has been fully completed, and pre-construction preparations are under way for Line 14 and Line 15. It is estimated that each production line will bring a pre-tax profit of more than 6 million yuan after reaching production. The company's own business layout in lithium battery separators includes three projects and five production lines, with a total production capacity of 57 million square meters and a total pre-tax profit of 91.48 million yuan. At present, the company has two lithium battery diaphragm production lines to be completed soon, and the profit before tax is expected to reach 61.07 million yuan, providing strong support for the company's performance.
The company is an important platform for civil-military integration under the Aerospace Science and Technology Group, and will benefit from Hebei Aerospace Industry Group:
The company is an important platform for civil-military integration of the group, and has in-depth cooperation with other scientific research institutes of Aerospace Science and Technology Group in lithium diaphragm, photovoltaic backplane and other business. In addition, the company is located in Baoding, Hebei Province, located in the Beijing-Tianjin-Hebei coordinated development area, adjacent to the Gu'an Aerospace Industry Group, and will directly benefit from the radiation effect of the joint development of Xiongan New area construction and other industries of the Group in the future. According to the description of the No. 1 document of Aerospace Science and Technology Group in 2013, we judge that the company is expected to become the focus of the integration of military industrial resources of Aerospace Science and Technology Group.
Profit forecast and investment suggestion
We believe that the research and development technology of Lucky film in lithium battery separator, combined with the strong production capacity of China Science and Technology, mature management team and upstream and downstream resources, will produce obvious industrial synergy and effectively contribute to the rapid development of the company's lithium battery separator business.
China Science and Technology achieved a revenue of 253 million yuan in 2016 and a net profit of 29 million yuan. We do not consider the performance enhancement brought by China Science and Technology for the time being. It is estimated that the company's operating income in 2017-2019 is 16.47max 18.59 / 2.119 billion yuan, an increase of 15.9% 12.9% 14x0% over the same period last year; and the homing net profit is 0.59 pm 0.74% 92 million yuan, up 43.0% 25.1% 24.4% over the same period last year. We believe that the company has a clear expectation of future performance growth, and is expected to benefit from the reform process of the Aerospace Science and Technology Group, maintaining the "buy" rating of the company, with a target price of 20 yuan for 6-12 months.
Risk.
The production of lithium battery diaphragm project is not as expected; the growth rate of photovoltaic industry is not as expected; the market scale of traditional photosensitive materials and image materials is greatly reduced; and the process of asset integration is not as expected.