Events:
On December 4, the company issued an announcement explaining the implementation progress and orders of the "Rail vehicle Manufacturing and Aluminum profile Deep processing Construction Project" funded by the company's non-public offering in 2016.
Main points of investment:
Cut into the "rail transit" and expand the "deep processing" business. In 2016, the company raised 3 billion yuan through a non-public offering to increase its subsidiary Shenyang Liyuan track equipment Co., Ltd., and cut into the field of rail transit vehicle manufacturing and aluminum profile deep processing construction, in order to improve the company's manufacturing level. After the completion of the project, the company has an annual production capacity of 1000 passenger rail vehicles (including EMU, aluminum alloy metro, stainless steel metro), 1000 aluminum alloy trucks and 60,000 tons of aluminum profile deep processing products. will form the company's high-end equipment manufacturing capacity and further enhance the company's aluminum profile deep processing level. It is estimated that after the project reaches production, the average annual sales income is 12.5 billion yuan, and the after-tax profit is 1.1 billion yuan.
In 2016, fund-raising projects began to bear fruit, with "deep processing" and "rail transit" working at the same time.
After 15, 16 and 17 years of planning and preparation, the fund-raising project has achieved initial results. In terms of "deep processing", it began trial production in September 2016 and gradually accepted orders from 3C, automobiles and other major customers. In terms of "rail transit", in the domestic market, the company has accepted 15 orders for subway body profiles from CRRC Changchun Rail passenger car Co., Ltd., and 6 orders for 350 standard integral coupler seat profiles from CRRC Tangshan Locomotive and Rolling Stock Co., Ltd. In foreign markets, the vehicle frame parts currently produced by Shenyang Liyuan track equipment Company will be shipped to Indonesia on December 9, 2017, with three sections, and the rest will be delivered before March next year. The owners of rail cars sent to Indonesia will be used for sightseeing cars for the 2018 Jakarta Games. Borrow "Belt and Road Initiative".
Policy Dongfeng, in the future, rail transit projects represented by high-speed rail will go abroad one after another, enhance Liyuan refining overseas popularity, open overseas markets, and seize market share.
Maintain the buy rating. The company has obvious regional advantages and strong operating ability. at the same time, it continues to optimize the product structure and expand to high processing fee products. At present, the high processing fee projects raised and invested by the company have begun to increase in volume, volume and price have risen, and profits are expected to grow at a high speed. We estimate that the EPS of the company from 2017 to 2019 is 0.50,0.81,1.18yuan respectively, and the PE of the corresponding stock price is 19.81,12.25,8.48times respectively. Maintain a "buy" rating.
Risk hint: the risk that rail vehicle manufacturing and aluminum profile deep processing construction projects are not as expected, the rapid rise in aluminum prices makes it impossible for the company to transfer rising costs downstream, and the risk of macroeconomic decline.
