In terms of traditional cars, the original model T700 is launched heavily, and Zhongtai is expected to turn around gorgeously. In order to survive in the fierce market competition, Zhongtai car building relies on imitation from scratch. At this stage, Zhongtai has accumulated a wealth of experience and funds, and it is natural to return to independent research and development. At the end of May 2017, Zhongtai launched the blockbuster original model T700dT700, a medium-and large-scale SUV vacuum market with a precise positioning and low price, and its high performance-to-price ratio makes it more competitive than other similar models in the market. From June to September, Zhongtai T700 sales have increased from 2787 to 7811. We are optimistic about the rapid climbing of T700 sales in the future, and we are also looking forward to the reshaping of Zhongtai brand by T700 models.
In terms of new energy vehicles, consolidate the A00 level layout of the A00 level, and the sales NEV points from 2018 to 2020 are expected to increase the company's performance. Zhongtai Automobile is a pioneer in the new energy market. At present, it has an obvious advantage in the A00 market. The sales of A00 cars accounted for 11% of the pure electric market in 2016. In the future, new breakthroughs are expected to be achieved by virtue of the accumulation of technology in the new energy field and the efficient launch of new cars. According to the announcement, the company has a reserve of six new models, with a sales target of 106000 new energy vehicles and a CAGR of up to 30 per cent in 2020. With the introduction of the double points policy, assuming that the double points unit price from 2018 to 2020 is 600 yuan, 4000 yuan and 4000 yuan respectively, Zhongtai is expected to achieve a sales profit of 130 million yuan, 1.13 billion yuan and 1.19 billion yuan respectively, contributing to greater performance flexibility.
Holding hands with Ford to form a joint venture may benefit Zhongtai Motor in many ways. In August 2017, Ford joined hands with Zhongtai to establish a new energy vehicle company. The cooperation between the two sides may involve many aspects such as brand, technology and production management. Zhongtai is expected to use this cooperation to improve its brand image and vehicle manufacturing level, and the subsequent launch of new energy models is also worth looking forward to.
Investment suggestion: excluding the integral income for the time being, it is estimated that the EPS from 2017 to 2019 will be 0.64,0.99,1.18 yuan respectively, and the corresponding PE will be 21 times, 14 times and 11 times respectively. Considering the marginal improvement between traditional cars and new energy in 2018, the company will be given a reasonable PE of 26 times in 2017, with a target price of 16.64 yuan, with a "buy-A" rating for the first time.
Risk tips: independent research and development progress may not meet expectations, vehicle sales may not meet expectations, double points sales price may not meet expectations.