The leading position of ventilation equipment in subway and tunnel is stable, and the development prospect is considerable.
The company is the leading enterprise in the business of subway and tunnel ventilation equipment, and its main products cover the application fields of subway, tunnel, nuclear power and other high-end products, with strong technology and R & D capabilities, through R & D and innovation, formed a number of ventilation equipment and ventilation system core technology, in the domestic industry in the leading level.
At present, there is still a certain gap between China's infrastructure construction and the 13th five-year Plan for infrastructure development goals, taking into account environmental factors such as the rise of many new cities in recent years, as well as China's industrial manufacturing upgrading and other background. the company's overall development prospects and market space are still considerable.
Mergers and acquisitions are progressing smoothly, and a new platform for military equipment is ready to be launched.
The company previously announced that it planned to buy 100% of Hongxiang Technology and Zhongqiang Technology for 2.21 billion yuan.
Among them, the transaction price of Hongxiang technology is 1.16 billion yuan, and that of Zhongqiang technology is 1.05 billion yuan. The company pays all the transaction price of the underlying assets to the other party by issuing shares and paying cash, of which 1.806 billion yuan is spent on issuing shares. The issue price is 24.40 yuan per share. At the same time, the total amount of matching funds raised by the company does not exceed 985 million yuan, of which 59.38% are subscribed by major shareholders and 40.62% by other shareholders. And the major shareholders promised to hold shares and new shares for five years from the end of the share issue of this transaction. After the completion of this transaction, Hongxiang Technology and Zhongqiang Technology will become wholly owned subsidiaries of Golden Shield. At present, the merger and acquisition is progressing smoothly, and the transfer of the underlying assets has been completed. The company is about to embark on a new journey as an equipment platform for civil-military integration, and this fund-raising project will also promote the further development of the company in the fields of infrared imaging and stealthy camouflage equipment, which will become an important support for the rapid growth of the company's performance in the future.
The target companies promote each other and their profitability is significantly improved.
The infrared and ultraviolet imaging technology owned by the target Red Phase Technology and the stealth camouflage technology owned by Zhongqiang Technology are mutually compatible in nature, "the technological complementarity is expected to further accelerate the technological upgrading of the two target companies. In the future, the technical R & D personnel of the two sides will cooperate closely in pre-R & D and performance testing, so that they can not only use mature military product development technology and experience to promote the development of civilian products, but also use advanced civilian technology to promote military technology, promote the product research and development and performance improvement of both sides, form a sustainable virtuous circle, and effectively enhance the comprehensive competitiveness of listed companies. Hongxiang Science and Technology promised to return to its mother not less than 50 million yuan, 75 million yuan, 93.75 million yuan and 117.2 million yuan respectively in 2016-2019; Zhongqiang Science and Technology promised to return home net profit of not less than 35 million yuan, 7000 million yuan, 9450 million yuan, 12757.50 million yuan and 17222.63 million yuan respectively from 2016 to 2020. With the cooperation of the underlying companies, the profitability of listed companies will be significantly improved in the future.
Investment suggestion: we believe that under the dual drive of the company's endogenous extension, the company's future profits will increase significantly. Regardless of the impact of this merger and acquisition, the company is expected to achieve a net profit of 52.15 million yuan, 58.37 million yuan and 68.7 million yuan in 2017-2019. If this merger is considered, the company is expected to make a net profit of 202 million yuan, 343 million yuan and 472 million yuan in 2017-2019, assuming that the share capital is diluted to 266 million shares. The corresponding EPS is 0.76,1.29,1.77 yuan respectively. The current stock price corresponds to a dynamic PE of 50 times, 29 times and 21 times respectively, covering for the first time and giving a "buy" rating.
Risk hint: the progress of subway and tunnel construction slows down, and the performance of mergers and acquisitions falls short of expectations.