Summary of the report
BAIC plans to inject BAIC new energy assets into Vanguard (600733), making Vanguard the first new energy vehicle share in the domestic capital market. The prospect of the industry is broad, and pure electric navigators set sail.
The restructuring plan includes: 1) the shares of the controlling shareholders of Vanguard shares will be transferred to BAIC for free; 2) the non-tradable shareholders will send 4% of the shares to the shareholders of tradable shares; 3) BAIC's new energy assets will be replaced with Vanguard's assets and liabilities (priced at 187 million), which will be undertaken by Xintaike. 4) BAIC New Energy is priced at 28.85 billion yuan, and the difference between the proposed assets and the proposed assets will be purchased by Vanguard shares, issuing 761 million shares at an issue price of 37.66 yuan per share; 5) raising matching funds no more than 2 billion; and 6) capital accumulation fund to increase equity.
BAIC New Energy has been the top seller of pure electric passenger cars in China for five years in a row, and it is a well-deserved leader of new energy vehicles. BAIC New Energy has maintained double sales growth since 2014. The company sold more than 100000 vehicles in 2017, with a market share of 23.3%. Single-brand sales rank second in the global pure electric vehicle market, slightly lower than Tesla, Inc. 's sales, of which the EC series has become the world leader in sub-model sales.
The product layout is perfect, seizing the blue ocean market of new energy in all directions. The company achieves full coverage of A00, A0, A, B and other market segments. The combination of EC+EX series national cars stands firm in the economic market, the EU+ET series grabs the middle and high end market, and the EU replacement version + EC time-sharing version accurately cuts into the taxi and rental market.
In addition, the establishment of ARCFOX high-end brand, the launch of LITE boutique crossover.
The R & D strength is strong, and the technical level is leading. The company has the largest domestic new energy engineering research institute and five countries and seven overseas R & D centers, Beijing's first national science and technology innovation center and two national key R & D programs of the Ministry of Science and Technology. The company takes the lead in technology in the fields of three electricity and lightweight, the number of patents far exceeds the industry average, and fully participates in the formulation of industry standards. The company has reached a strategic agreement with Daimler and Baidu, Inc. to carry out in-depth cooperation in product development, intelligent driving and other fields.
Double points landing + technical requirements are improved, the advantages of leading companies are highlighted. Double points system relay subsidy system, with the goal of 5 million new energy in 2020, BAIC New Energy will occupy the most points resources, and industry leaders will fully enjoy the dividend. The technical threshold is raised and the space of small car companies is squeezed. BAIC New Energy, as a leader, benefits from the increase in concentration and the significant increase in bicycle profits brought about by vehicle upgrading.
The valuation of the company is reasonable, and the profit of the tuyere company continues to increase. The company will enjoy high performance growth and high valuation in the next three years. In terms of the margin of safety, the PE is expected to be about 10 times in 2020. Round B financing highlights the strong optimism of the capital market, employee stock ownership shows confidence in the operation of the company and the determination of the government to promote. From the comparable price-to-book ratio of similar companies, BAIC New Energy's current valuation is reasonable and there is still much room for market capitalization growth. With the high growth of the company's performance, we are optimistic about the future prospects of the company.
Investment suggestion: assuming that the restructuring is successful, the company's 18-20 exam net profit is expected to be 5.6pm 1.37pm 2.83 billion, and BAIC's new energy evaluation value corresponds to 51.5 PE 20.9max 10.2 times in 18-20.
The company's leading position is strong in growth, and it is scarce. Give a rating of "overweight".
Risk hint: the sales volume of the industry is lower than expected; the profit of the product is lower than expected; there is the risk of not being approved by the CSRC.