Main points of investment:
Company announcement: 1) in response to the national strategy of deepening supply-side structural reform, making full use of the resources of all parties and promoting strategic cooperation, the company recently signed a "cooperation agreement" with Guangrao Caijin and Shandong Yinji. The three parties aim to make use of their respective resource advantages to integrate the tire industry in Guangrao County by setting up a tire restructuring operation company. It is proposed to set up a Guangrao tire industry integration fund (total size RMB 10 billion, the first phase RMB 900 million). Through the reorganization of the tire industry in Guangrao County, it will accelerate the conversion of new and old kinetic energy of the tire industry and promote the development of the tire industry in Guangrao County. 2) the company leases Shandong Hengyu science and technology production capacity, fixed assets lease equipment and moulds with full steel tire equivalent to 650,000 sets / year production capacity, and semi-steel tire equivalent to 6 million sets / annual production capacity equipment and moulds, etc., the monthly rent of the leased subject matter agreed in this contract is: 6 million yuan for the first full month from the expiration of the lease-free period, 7 million yuan for the second full month, and 8 million yuan per month thereafter, including tax.
Based on the tire supply-side reform, integrate the stock resources to achieve rapid expansion. At present, the domestic tire industry has overcapacity, there are many enterprises in the industry, and the operating rate of enterprises has been lower than 70% for a long time, especially for small and medium-sized enterprises, which is lower than 50% for a long time because of capital reasons. The company achieves rapid development through the integration of excellent domestic tire production capacity. Long-term lease of Shandong Hengyu science and technology production capacity. The establishment of a tire supply-side reform fund is expected to achieve equity cooperation with tire enterprises in Guangrao County, Shandong Province. It is expected to achieve the rapid expansion of the company's production capacity and the rapid development of the company.
The company implements 20 million restricted stock incentives to stimulate the new vitality of state-owned enterprises. The company announces the implementation of 20 million restricted stock incentives, and the incentive targets of this incentive plan are a total of 20 million directors, senior managers and middle managers and core backbone whom the board of directors of the company thinks should be encouraged. It accounts for 2.96% of the company's total share capital of 674.5789 million shares at the time of the announcement of the draft incentive plan. The grant price of restricted stock is 3.14 yuan per share, that is, after the grant conditions are met, the incentive object can purchase the additional restricted stock issued by the company to the incentive object at the price of 3.14 yuan per share. Based on the average net profit from 2018 to 2015, the growth rate of net profit from 2013 to 2020 is not less than 150%, 180%, 230% and other restrictions. This large-scale incentive is expected to stimulate the new vitality of state-owned enterprises and promote stable performance growth.
Capacity relocation and raw material price fluctuations, the company's performance is still steady growth, relocation is expected to receive a large amount of compensation. At present, the company has the production capacity of 4.75 million all-steel tyres and 6 million semi-steel tyres, of which 4 million all-steel tyres are in the stage of capacity relocation. After the completion of the relocation, it will have the production capacity of 5 million all-steel tyres and 10 million semi-steel tyres. The relocation will add 4 million semi-steel tire production capacity to be gradually put into production. As the company is mainly all-steel supporting, the customer structure is simple, the price of raw materials fluctuated sharply in the first quarter, the company's performance still maintained steady growth. The Shiyan municipal government collects and stores about 725 mu of land and above-ground assets of Dongfeng tire and gives relocation compensation. On the one hand, the relocation will help the company to realize the conversion of new and old kinetic energy and accelerate industrial upgrading, on the other hand, 725 mu of land will be relocated. It is expected to get a large amount of compensation.
Industrial 4.0 intelligent chemical plant gradually reached production, brand output both increased. The company's global model and market innovation center and the global technology and demand innovation center (including the global graphene tire R & D center) have been fully completed and put into operation; the commercial tire full process industry 4.0 intelligent chemical plant has reached full production. Passenger tire full process industry 4.0 intelligent chemical plant is also about to be fully put into production, adding 4 million of semi-steel tire production capacity by the end of the year and next year step by step into production.
Profit forecast and investment rating: the intelligent model factory has been completed and put into production, and the level of net interest rate is expected to increase gradually. it is expected to integrate high-quality resources at home and abroad and become a new tyre giant in China. It is estimated that the EPS of 17-19 will be 0.23,0.39 and 0.45 yuan respectively, corresponding to 27 times, 16 times and 14 times of PE in 17-19 years.
Risk tips: fierce competition in domestic and foreign markets, industry integration is not up to expectations, market development is not up to expectations.