Announcement:
The company announced on July 11 that it participated in the establishment of the Yangzhou Shangqi Automobile Industry Equity Investment Fund. The target size of the Yangzhou Shangqi Fund, which was jointly established by all parties, was RMB 1 billion, and the total amount pledged in the first phase of the fund was 555.6 million yuan, of which Shangchai Co., Ltd. invested 150 million yuan, accounting for the highest share of investment. SAIC Motor Group Equity Investment Co., Ltd. invested 100 million yuan.
Comment:
1. The Fund's main investment direction is: mainly in the automotive industry chain, focusing on new energy, energy saving and environmental protection, semiconductors, automotive aftermarket and high-end manufacturing, with an appropriate balance of other high-quality projects. Among them, the investment ratio in the automobile industry chain and key areas of focus is not less than 70% of the total investment paid by this partnership. The scope of investment is to invest in enterprises within and outside of China through equity and debt-for-equity swaps, and use various exit methods to increase investment value.
2. Shangchai Co., Ltd. has always been an enterprise with traditional diesel engines as its main business. The company's previous mergers and acquisitions also revolved around its main business. Given that the NEV sector will develop rapidly in the future, combined with the company's future development strategy, it may find a new direction in the NEV field. The company's investment in setting up funds this time is beneficial for the company to use the resources of professional investment institutions to improve the professionalism of the operation of foreign investment targets, explore the pace of the company's extended development, which is in line with the company's future strategic development, and is conducive to using the capital market to discover high-quality investment targets and cultivate new profit growth points. However, due to the long investment cycle of the fund, it is expected that this investment will not have a significant impact on the company's financial situation and operating results.
3. The company's traditional main business is developing steadily. The company is a traditional commercial vehicle and construction machinery diesel engine company, and later entered the passenger vehicle sector. Judging from the current downstream sales situation, commercial vehicle and construction machinery sales are growing steadily, and the company's main business is developing steadily.
Investment advice and ratings: The company's net profit in 2019-2021 is expected to reach 126 million, 143 million, 166 million, and PE 53 times, 47 times, and 40 times, maintaining the “increase in holdings” rating.
Risk warning: downstream sales have declined sharply, and the expansion of the new energy sector has fallen short of expectations