The current situation of the company
The company recently announced the asset restructuring and adjustment plan, which adjusts the issued shares to purchase assets into a major asset replacement. It is proposed to put 100% equity held by China Shipbuilding Group, 51% equity stake in China Shipbuilding Power Research Institute, 15% equity stake in China Shipbuilding Mitsui and 100% equity stake in Hudong heavy Machinery held by China Shipping Group after the completion of China Shipping Asset Exchange. Carry on the asset exchange with the equivalent part of the Wenchong stake in Whampoa and Guangzhou Shipping International held by the company.
Comment
Will be used as a ship power listing platform to undertake group-related assets. After the completion of this major asset exchange, the company's main business will be changed to the development of high-end marine power equipment, the main products include marine low-speed engine, marine high-power medium-speed engine, marine generator, power integration system, electrical integration system and so on.
Proposed assets: 100% equity interest in China Shipbuilding Power (estimated value 2.592 billion yuan, implied 1.41 x 2018 P Cigub), 51% equity interest in China Shipbuilding Power Research Institute (estimated value 772 million yuan, implied 1.35 x 2018 P hand B), 15% equity interest in China Shipbuilding Mitsui (estimated value 260 million yuan, implied 1.44 x 2018 P hand B) and 100% equity stake held by China Shipbuilding Group after the completion of China Shipping assets replacement (estimated value 7.5 billion yuan, 7.5 billion yuan, etc.) Implied 1.5x2018 pinning B) The total estimate is 11.124 billion yuan.
Proposed assets: partial equity of Guangzhou Shipping International and partial equity of Wenchong of Whampoa (estimated value implied respectively 1.32x/1.52x 2018 Pbig B), with a total estimated value of 13.377 billion yuan.
Net profit is expected to increase significantly. After the completion of the replacement, the high-quality power assets of China Shipping Group will enter the listed company. Hudong heavy Machinery / China Shipbuilding Power / China Shipbuilding Mitsui will achieve a net profit of 190 million yuan / 14 million yuan / 95 million yuan respectively in 2018, an increase of 20% / turnround / 71% over the same period last year, with good profitability and good growth. We estimate that after the completion of the transaction, China Shipping Defense A will correspond to 2.6x 2018 exam Prep Pmax B, and China Shipping Defense H will correspond to 1.1x 2018 Prep Pamp B.
Valuation proposal
Keep the profit forecast unchanged. The current A shares of the company correspond to 2.3 times of 19max in 20 years, while H shares only correspond to 1.1 and 1.0 times of Pripple B. Be optimistic about the profit contribution of the ship power business and the potential of the company's state-owned enterprise reform, and maintain the recommendation and the target price of Amax H unchanged, which corresponds to 19e 2.9x/1.2xP/B, with a potential increase of 30% and 11%.
Risk
The uncertainty of asset reorganization