The company issued an announcement: Haixin Investment plans to introduce strategic investors and reduce the pledge rate through bailouts. The number of company shares reduced by agreement transfer within six months of three trading days from the announcement date to no more than 52,684,800 shares of the company, accounting for 12% of the company's total share capital. The holdings reduction plan will be implemented in two installments. Currently, the transferee to be transferred by agreement for the first time is the Shaanxi Tongchuan Gold and Lithium Industry Development Fund (Limited Partnership). The number of shares transferred is 21,952,000 shares (accounting for 5% of the company's total share capital). Subsequent plans to transfer no more than 7% of the company's total share capital, and this portion of the transferee has not yet been determined.
Successfully introduced war investment to reduce pledge rates and pledge risks
This reduction in holdings is actually introducing strategic investors, which will help the majority shareholders reduce their pledge rate and fully reduce the risk of high pledge. According to the company's quarterly report, Haixin Investment, the majority shareholder, held 52.50% of the company's shares, with pledged shares accounting for 94.7% of its total holdings and 35.51% of the total share capital. With the introduction of strategic investors this time, the majority shareholders will reduce their shareholding by no more than 12% through agreed transfers, which will effectively reduce the pledge rate and fully reduce the risk of high pledge.
Introduce war investment to optimize the equity structure and bring development resources to the company
The company has now carried out two rounds of strategic investor introduction, which is conducive to optimizing the equity structure+introducing development resources: 1) Jilin Chengpu transferred its 20,384,000 shares of Bailey Technology (accounting for 6.5% of Baili Technology's total share capital) to Deqing Tongli at a price of 20.76 yuan per share (Shandong Railway Investment holds 78% of Deqing Tongli's shares). 2) The fund manager of the main transferee of the Gold Lithium Industry Development Fund this time is Shaanxi Jinzi Fund Management Co., Ltd., which has a management scale of over 10 billion dollars. As strategic investors, the two are more optimistic about the company's long-term development than simple financial investment, and have mature operating experience, and are expected to bring development resources to the company in the future.
Suppression factors are lifted, mature core business and active business development promote high growth
At this point, we firmly recommend the company, and believe that on the basis of mitigating the high pledge risk and successfully completing the reduction in the holdings of the two shareholders, the previous stock price suppression factors have been effectively lifted:
1) The realization of the growth capacity of the lithium battery business has become the company's core growth point. According to the 2018 annual report, the company's lithium battery/petrochemical business was 561 million yuan respectively, +473% year on year, accounting for 47%. The company currently has 3.5 billion lithium battery orders in hand, which strongly supports high growth in 2019.
2) Set up a joint venture to enter the field of high temperature proton exchange membranes and is committed to building a “Chinese core” for fuel cells. Company announcement: A joint venture was established with Kunai New Materials and Xiao Lixiang, a natural person, to Bailikunai Hydrogen Energy Membranes with a shareholding ratio of 45%, 35%, and 20%. It is committed to the development and application of high temperature proton exchange membranes. The joint venture will establish the Kunai-Bailey Membrane Electrode Test Laboratory (Asia). The laboratory will be built according to BASF (BASF) high temperature proton exchange membrane electrode laboratory standards to build an academic exchange and open platform for academic exchanges and open platforms for various scientific research institutions, hydrogen fuel cell vehicle manufacturers, enterprises and institutions in the Asia-Pacific region to conduct technical tests in the field of hydrogen fuel cells.
Profit forecast and investment rating: The company's net profit for 2019-2021 is estimated to be 329 million, 483, and 575 million respectively. The corresponding PE is 17.61 and 12.01 times and 10.09 times, respectively, maintaining the “buy” rating.
Risk warning: War investment did not bring development resources, competition in core business industries intensified, business expansion was blocked, etc.