Main points of investment:
The company plans to acquire 100% stake in Yingnai and 43% stake in Shanghai Qiancheng. The company intends to issue shares and pay cash to acquire 100% equity of Wulian, with an estimated value of 900 million yuan, 38.93 million shares to be issued to pay 790 million yuan, with a proposed offering price of 20.3 yuan per share, and a cash payment of 100 million yuan. The company plans to issue 6.78 million shares to purchase 43% of Qiancheng Machinery, with an estimated valuation of 137.6 million yuan and a proposed offering price of 20.3 yuan per share. After the completion of the acquisition, the company realized 100% control over Shanghai Qiancheng Machinery.
Supporting financing plan: the company plans to invest in non-public offering shares of JD.com Jinquan and Hongzhao to raise 600 million yuan to pay the cash consideration of this transaction, the new electronic label development and industrialization project, the Internet of things big data operation platform construction project, large-scale unmanned shopping center intelligent equipment and system development and industrialization project, domestic marketing network construction project and so on.
Acquire and build a perfect layout of intelligent logistics system. After the acquisition of IWU, the company has improved the layout of the picking field (RFID) in the intelligent logistics system, and now has an all-round intelligent logistics system storage system, transportation system, picking system, palletizing system, warehouse management and control system, which can be customized to create an intelligent warehousing and logistics system for customers and greatly enhance their competitiveness. In terms of subdivision, the storage system: HKUST Intelligence, etc.; Transportation system: Huaxiao Precision, etc.; picking system: Yingli things Union; palletizing system: Yongqian Mechatronics, etc.; Warehouse Management Control system: HKUST Intelligent Logistics, etc.
The introduction of strategic investors such as JD.com Jinquan brings opportunities for the development of intelligent logistics system. The strategic introduction of JD.com Jinquan is of great significance for the development of intelligent logistics system in the field of intelligent logistics system of HKUST: 1) at present, HKUST Intelligence already has the ability to build intelligent logistics system in all aspects. It can provide integrated solutions of intelligent logistics and warehousing for strategic investors such as JD.com Jinquan. We expect that JD.com Jinquan will also greatly promote the landing of intelligent logistics solutions of HKUST. 2) IoT has strong industry experience and technical precipitation in the field of Internet of things, which can provide strategic investors such as JD.com Jinquan with large-scale RFID electronic label products, intelligent new retail system development and Internet of things big data management services.
Profit forecast and investment advice. Excluding the acquisition of shares in Wuli and Shanghai Qiancheng, the company's net profit from 2017 to 2019 is expected to reach 350 million yuan, 436 million yuan and 536 million yuan, an increase of 26.61%, 24.42% and 22.92% respectively over the same period last year. After the completion of the acquisition, the net profit from 2018 to 2019 is expected to reach 514 million yuan and 633 million yuan, corresponding to earnings per share (assuming that the matching financing share price is calculated according to today's closing price). After completion, it will be valued 55 times in 2018, and the corresponding price will be 35.47 yuan per share.
Risk factors. The risk that the acquisition can not be completed successfully, and the risk that the industrial consolidation is not as expected.