The company is a high-quality leader in the global spinning machinery industry, and its value is undervalued. It is proposed to use 6-1.2 billion yuan to buy back the company's shares in order to improve the incentive mechanism.
Main points of investment:
Conclusion: the company is a high-quality leader in the spinning machinery industry, with a market size of 10 billion US dollars. It is proposed to use 6-1.2 billion yuan to buy back the company's shares in order to improve the incentive mechanism. It is estimated that the company's EPS from 2019 to 2021 will be 0.30,0.34,0.36 yuan. Considering the company's role as the industry leader and future performance growth, the company will give a target price of 8.0 yuan, corresponding to 23 times PE in 2020, to increase its holdings.
The company is the global leader in spinning machinery with a market size of 10 billion US dollars. ① is a high-quality leader in the spinning machinery industry with a long history and users all over the world. Through the acquisition of the Saurer brand, the company has become the world's leading spinning machinery leader, and its profitability is higher than that of comparable companies in the same industry. The global market size of ② 's field is about $12 billion, with a corresponding market share of about 11%. The subsidiary Zhuolang Intelligent Machinery promised a net profit of 2.35 billion yuan in 2017-19 and exceeded its performance commitment in 2017-18. ③ Litai Lion Dance is a leading enterprise in the domestic cotton textile industry. In recent years, it has built automatic spinning plants in Xinjiang, Uzbekistan and other places; the company relies on related transactions with Litai Lion Dance, and its income has grown rapidly in recent years.
It is proposed to use 6-1.2 billion yuan to buy back the company's shares in order to improve the incentive mechanism. ① Company shall buy back the shares of the company with its own or self-raised funds of 6-1.2 billion yuan, and the repurchase price shall not exceed 9.59 yuan per share. The buyback shares are intended to be used in equity incentives and employee stock ownership plans, giving priority to equity incentives. As of October 2019, ② has accumulated 109 million yuan of repurchased shares, with a transaction price range of 7.10-7.97 yuan per share. ③ 's large share buyback plan demonstrates confidence and further improves the company's incentive mechanism. Short-term decline in industry demand, the company as the global leader in spinning machinery, the value is undervalued.
Catalyst: large orders from customers at home and abroad.
Risk factors: related party transaction risk, overseas business operation risk.