Notice: on March 21, 2019, Jiangmen Keheng Industrial Co., Ltd. (hereinafter referred to as "the company") and the Management Committee of Liyang Economic Development Zone "letter of intent for Investment in Keheng Lithium New Energy Intelligent Industrial Park". The company plans to rely on the company's lithium equipment and lithium cathode materials to invest in the construction of the "Keheng Lithium New Energy Intelligent Industrial Park Project" in Liyang Economic Development Zone.
The raw materials of cathode materials are dehydrated rapidly, customers are expected to upgrade beyond expectations, and gross profit margin is expected to increase to the normal level. The production capacity of the company's cathode materials is 3000 tons in Yingde I phase, 8000 tons in II phase (3000 tons of lithium cobalt + 5000 tons of high nickel ternary) and 6000 tons in Jiangmen, all of which have been completed except 5000 tons of high nickel in Yingde II phase. The company's sales of cathode materials continued to grow at a high speed, with sales of 1441, 3255 and 6035 tons respectively from 2015 to 2017, and sales of 2.05,4.91 and 1.239 billion yuan respectively. Previously, the company's cathode materials business was in a state of increasing revenue and poor profitability, mainly due to a sharp drop in cathode prices in 2018 (Sanyuan cathode fell by 33 per cent from nearly 240000 at the end of 2018Q1 to about 160000 at the end of 2018), while the company's inventory increased significantly since the end of 2017, with gross profit margin falling to less than 8 per cent under the inventory-weighted average method. In 2019, the company's high-priced inventory has been eliminated, and the customer structure is expected to upgrade from small and medium-sized to large customers, and this year's gross profit margin is expected to increase to about 10 points in neutral cases.
Coating equipment is actively developing the fuel cell market and has supplied proton exchange membrane coating machine products. The core of the vehicle fuel cell system is the stack, and the fuel cell unit in the stack is mainly composed of membrane electrode and bipolar plate. Membrane electrode is the core of fuel cell. The membrane electrode is mainly composed of catalyst, gas diffusion layer (carbon paper) and proton exchange membrane. These basic materials have been arranged in China, and the membrane electrode needs to be strengthened. Haoneng Technology has been in the layout of fuel cell industry for a long time, and the fuel cell membrane electrode coating machine has realized the technical application of proton exchange membrane and positive and negative electrode coating, which meets the approval of fuel cell enterprises. Haoneng technology has become the top international advanced level in membrane electrode coating.
The company intends to acquire Yuchen Automation and Chengjie Intelligence to get through the front, middle and back end of lithium power equipment, and is expected to achieve customer coordination. The company disclosed the transaction notice on the evening of March 1, and intends to purchase 100% equity of Yuchen Automation and Chengjie Intelligence with a total consideration of 1.1 billion yuan by issuing shares and paying cash. It is not a public offering to raise matching funds of no more than 658 million yuan. It is proposed to acquire 100% equity of Yuchen Automation at a consideration of 450 million yuan, of which: 293 million yuan is paid by stock issuance, accounting for 65% of the transaction consideration, the issue price is 16.03 yuan per share, the number of shares issued is 18.25 million shares, and 158 million yuan is paid in cash, accounting for 35% of the transaction consideration. The acquisition price / earnings ratio is 21.68X. The 100% stake in Chengjie Intelligence was acquired at a consideration of 650 million, of which 392 million yuan was paid by share issuance, accounting for 60% of the transaction consideration, the issue price was 16.03 yuan per share, the number of shares issued was 24.42 million shares, and 258 million was paid in cash, accounting for 40% of the transaction consideration. The acquisition price-to-earnings ratio is 19.85X.
Performance commitment: the net profit of Yuchen Automation 2018 / 20119 apprenticeship is not less than 30 million yuan / 40 million yuan / 50 million yuan, corresponding to the price-earnings ratio of 15.0X / 11.3X / 9.0X; Chengjie Intelligent 2018Universe 2020 deduction non-return net profit of not less than 35 million yuan / 65 million yuan / 7500 million yuan, corresponding to the price-earnings ratio of 18.6X/10.0X/8.7X.
Profit forecast and investment rating: excluding the acquisition of Yuchen Automation and Chengjie Intelligence, the company's 18-20 year exam preparation net profit is 0.64,1.35 and 230 million yuan respectively, corresponding to PE of 71.33,33.73,19.82; considering the completion of the acquisition, the company's 18-20 year test preparation net profit is 1.29,2.40 and 355 million yuan respectively.
Risk tips: business integration is not as expected, lithium material demand is not as expected, company order delivery and revenue confirmation are not as expected, downstream customer bidding is not as expected, industry competition is intensified, etc.
