Events:
The company announced on December 26 that Xiao Xing, the company's controlling shareholder and chairman, also urged all employees to buy the company's shares. For those who net buy the company's shares during the period from December 27 this year to January 12, 2018, and hold them for more than 6 months in a row, and the holding period is continuous, if a loss is incurred as a result of the purchase of the company's shares, the loss shall be partially compensated by them. at the same time, 3% interest subsidy is given to the principal; if the income is owned by the employee, if the income is less than 3%, the insufficient part shall be made up.
Show strong confidence in business development, and the company's long-term competitiveness is expected to be re-recognized.
We believe that the chairman's call demonstrates the company's strong confidence in business development. We think the effect of this call is similar to that of the chairman of the board of directors to increase his stake in the company. The company's current price has a medium-and long-term safety margin, and the company's stock price is only about 19x corresponding to the 2018 PE.
In the long run, the company's competitiveness is expected to be re-recognized. First, the company has actually changed significantly since its listing, and its core customers are expected to upgrade from "Zhongtai" to the joint venture system. Second, the company makes up for the shortcomings of R & D investment, which has previously been subject to objective factors, and the promotion of new products such as intelligent cockpits is expected to accelerate.
Maintain the buy rating, stock price fluctuations do not change long-term confidence
Benefiting from the two major industrial trends of intelligent cockpit and domestic substitution, the company's high growth is a high probability event. The net profit is expected to be 174 million yuan in 2017 and 300 million yuan in 2018. Maintain the buy rating with a target price of 26 yuan, corresponding to the 2018 PE 36X.
Risk hint: the harvest process of middle and high-end customers is not as expected; the release process of smart cockpit is not as expected; the progress of employee ownership increase is lower than expected.
