Incident: (1) Hanrui Holdings plans to transfer 72 million unrestricted tradable shares held by the Company through a public solicitation of transferees, accounting for 12.5% of the company's total share capital. (2) The company plans to establish an AESC China Investment Company with investments such as Straits Petrochemical. The company invested 1.53 billion yuan in cash, accounting for 51% of the registered capital. The joint venture will use Nissan battery technology to invest in 20 GWH ternary lithium batteries and R&D base projects with an annual output of 20 GWH.
Jointly with GSR GO Scale to lay out the lithium battery industry. Ternary lithium batteries are gradually becoming the main development trend of power batteries. AESC China will invest 2 billion yuan to participate in the establishment of a power battery industry fund. The Battery Industry Fund, Jinshajiang and third parties jointly invested to establish the AESC Zhenjiang Project Company. It plans to invest in the construction of a ternary lithium battery with an annual output of 20 GWH and a R&D base.
After the project is fully completed, it will bring in 20 billion yuan in revenue and greatly enhance the company's performance.
At the same time, laying out the field of new energy vehicles is also conducive to accelerating the company's strategic transformation.
The reform of state-owned enterprises continues to advance, and the three major strategic sectors have taken shape. The company intends to explore mergers and acquisitions in various fields through asset divestment, mergers, acquisitions and restructuring, and the establishment of investment funds, etc., and to use the capital market to grow bigger and stronger. The layout of the three strategic emerging industries of “new energy” + “integrated circuit” + “military industry” was initially formed, and on July 3, the equity change procedures for assets such as Hong Kong and New Materials were completed, and the loss-making assets were divested. The pace of corporate national reform is firm. As policy dividends continue to be released, there is huge room for imagination in national reform.
The merger and acquisition of Aiko entered the integrated circuit industry, and is expected to continue to lay out the electronics industry chain in the future.
The scale of the IC industry in mainland China reached 361 billion yuan in 2015. The self-sufficiency rate is less than 40%, and there is huge room for import substitution. Third-party testing has become a trend of vertical segmentation as chip size increases demand for high-end testing. The concentration of the independent testing industry is low and facing the demand for integration. Currently, the company accounts for only 1%, and there is a lot of room for development. The company relies on ECO as a platform for the electronics industry, and is expected to continue to expand into the integrated circuit industry chain in the future.
Catalysts: Company state-owned enterprise reforms may accelerate; industrial integration will accelerate.
Investment ratings and valuations: The estimated net profit for 17-19 is 2.09 million, 307 million yuan, and 389 million yuan, EPS is 0.36, 0.53, and 0.67 yuan, and corresponding PE is 33X, 23X, and 18X.
Maintain the “Highly Recommended” rating.
Risk warning: The progress of the ternary lithium battery project has been blocked.