Key points of investment:
With the comprehensive layout of the connected vehicle industry chain, the field of new energy vehicles has remarkable advantages. The company controls Intest (51% of the listed company, 49% of its industrial fund), and Intest's market share of the NEV front-mounted T-BOX is over 30%. Customers include BAIC, SAIC, Changan, etc. It holds 95 Smart Drive (58.23% of the shares), and its self-developed TSP service for connected vehicle operation has been applied by more than 10 high-end car companies such as Toyota, Ford, Mercedes-Benz, and BMW. It has a mature operating model, rich industry experience and high market share. It shares in Guangzhou League News (9.17% equity) and Rainbow Wireless (2.22% equity), focusing on connected car service applications and UBI auto insurance. Participate in the establishment of the Xingmin Automobile Industry Fund, fully implement the Internet of Vehicles transformation and upgrading strategy, and achieve the full intelligent connectivity layout of “T-BOX - Vehicle - Vehicle - Internet of Vehicles Operation”.
The card slot is the entrance to the NEV network, and the realizable value is broad. The company has the leading market share of NEV T-BOX terminals, and the entry value is very obvious. Building a national three-level monitoring system for NEVs (enterprise monitoring platform, local monitoring platform and national monitoring platform) is expected to create a new NEV networking platform. The era of connected vehicles is coming. In 2017, the market size of China's connected car industry will reach 269.6 billion yuan, and the compound annual growth rate for the next five years will be about 15.43%. The company only considers that the space for T-Box equipment to penetrate 40% of the front-loading market for newly sold vehicles is close to 10 billion yuan per year, and the market space corresponding to the operation of the Internet of Vehicles platform is also close to 10 billion yuan per year.
The company's CAGR is expected to be nearly 81% in the next three years from 2018-2020, which is expected to grow rapidly. T-BOX, smart in-vehicle terminals, and self-driving service operation centers are important profit growth points for the company over the next three years. The ecological monetization business of Internet of Vehicles platforms such as UBI Insurance and Data Operation will develop in depth to expand market space.
According to the smooth implementation of the agreement, the company's shareholding in Intest will increase from 51% to 100% in 2018. After the fixed increase is successfully completed, the company's holdings of 95 smart car shares will increase from 58.23% to 82.89% in 2018, and the scope of consolidation of shares of holding subsidiaries will expand. Considering the completion of the fixed increase, it is estimated that Xingmin Zhitong will achieve net profit of 155 million yuan, 209 million yuan, and 525 million yuan respectively in 2018-2020, with a three-year CAGR of nearly 81%. The company is expected to grow rapidly.
Profit forecasting and investment ratings: Based on the principle of prudence, when the non-public offering is not finalized, the dilution of the share capital and the influencing factors on performance of the additional issuance are not taken into account, and the impact factors of Intest's continuing consolidation of 49% of shares in 2018 are estimated to be 0.17/0.23/0.33 yuan respectively, and the corresponding PE is 75/56/40 times, respectively. Under the two major trends of the rapid development of the new energy vehicle industry and the advent of the Internet of Vehicles era, the company created an Internet of Vehicles data entry advantage, built an Internet of Vehicles platform ecosystem, was optimistic about the company's development, and raised the company's rating to “buy”.
Risk warning: The penetration rate of T-box products is lower than expected; the development progress of the Internet of Vehicles is lower than expected, the non-public offering cannot be successfully completed, and there is a risk that the remaining 49% of Intest's equity acquisition progress is lower than expected.
