Company announcement: double Star Group and its subsidiary Xingwei Korea Co., Ltd. and Jinhu Tire creditors signed the "relevant signing Agreement" on behalf of Korea Development Bank (KDB).
According to the agreement signed, follow-up double Star Group subsidiary Xingwei Korea will sign a "share subscription Agreement" and a "shareholder Agreement" with KDB. Xingwei Korea, a subsidiary of double Star Group, will increase the capital of Jinhu Tire by about 646.3 billion won, subscribe for about 129 million common shares issued by Jinhu Tire at the price of 5000 won per share, and then hold 45% of Jinhu Tire and become its controlling shareholder. The creditors introduced Shuangxing as the controlling shareholder of Jinhu tire in the form of capital increase, which increased the cash flow of Jinhu tire and was more conducive to the future development of Jinhu tire.
Jinhu tire has strong global layout, brand, R & D and supporting strength.
South Korea Jinhu tire has 5 R & D centers and 9 production plants around the world, with a total production capacity of 6900 million sets / year, which is a middle-and high-end brand with obvious market advantages: its original tire accounts for a high proportion. Provide original tires to Hyundai, Fiat, Chrysler, Daimler, Volkswagen, BMW, Renault, General Motors Co and so on. In addition to China, South Korea's Jinhu tire has five production plants in South Korea, Vietnam and the United States, with a complete global layout and avoiding the "double opposites" of various countries.
In addition, Jinhu has strong R & D strength, with 5 R & D centers in the world, which are located in South Korea (2), the United States, Germany and China. Double star's main advantage is all-steel tire, Jinhu advantage is semi-steel tire, if the acquisition is smooth, it will give full play to its complementary advantages and obvious synergy.
Double Star took the lead in setting up an industrial 4.0 intelligent chemical plant, leasing capacity to make up for the supply gap.
The company's intelligent model factory is basically completed, and the net interest rate of the new factory is expected to be greatly increased. The company has built 4 million sets of all-steel tire intelligent model factory, the net interest rate level will be significantly higher than the old factory, semi-steel tire intelligent factory is expected to be completed and put into production in the first half of this year. In order to make up for the supply gap during the capacity construction period, the company leases Shandong Hengyu science and technology production capacity: equipment and moulds with full steel tire equivalent to 650,000 sets / year production capacity, and semi-steel tire equivalent to 6 million sets / annual production capacity equipment and moulds.
Profit forecast and investment rating: take the lead in building an intelligent chemical plant, the price profit is expected to rise, is expected to become the largest shareholder of Jinhu tire, the future growth into a new domestic tire giant. According to the rating of increasing holdings, the EPS in 17-19 is expected to be 0.15,0.17,0.26 yuan respectively, corresponding to 44.6,39.6 and 25.2 times of PE in 17-19.
Risk hint: raw material prices fluctuate sharply, production capacity falls short of expectations, and acquisitions fall short of expectations.
