The company is mainly engaged in container handling equipment, intelligent CNC machine tools and stainless steel spot trading service business, container handling equipment business is the company's traditional advantage business, quayside crane, rail crane and other related products are in the international leading level. Runxing Technology, the main body of intelligent CNC machine tool business, is one of the leading domestic consumer electronics CNC machine tool enterprises; the supply chain service plate revolves around the "steel net".
Engaged in stainless steel and other commodity trading services. In 2019, the company achieved operating income of 13.687 billion yuan, + 37.59% compared with the same period last year, and achieved a net profit of 357 million yuan, + 15.96% compared with the same period last year.
Benefiting from the automatic port machinery project, the port machinery business is facing an inflection point of growth. The main products of container handling equipment are quayside crane, track crane and so on, which are mainly used in port container ship loading and unloading operation and other scenes. In March 2019, the company won the bid for 28 automatic rail container gantry cranes of Singapore Port Group, with a winning bid amount of US $76.38 million. With the increase in container transport volume and labor costs, and the rise of investment in automatic terminals, the company's port machinery business last year was only 344 million yuan. Next year, automatic port machinery will greatly increase the scale of traditional business. At the same time, due to the high gross profit of automatic port machinery, the gross profit margin of port machinery business is expected to increase, ushering in a double click.
Intelligent CNC machine tool business is mainly engaged in the R & D, production and sales of CNC CNC machine tool products, the main body "Runxing Technology" comes from the epitaxial merger and acquisition in 2017, Runxing products are mainly drilling machines, and the downstream mainly includes consumer electronics, communications and other fields. Three major growth drivers: ① CNC investment peak in 2012-2017, equipment replacement cycle arrived; ② 5G development brought about innovation in the internal structure of mobile phones, communications micro base stations, filters and other fields broke out, giving birth to new CNC equipment demand; ③ Apple Inc supply chain has a trend to shift to the mainland, the relevant domestic OEM and equipment manufacturers will usher in the development dividend. In 2019, Runxing Technology achieved a net profit of 373 million yuan, + 20.2% compared with the same period last year. Listed companies suffered a slight loss in their Hong Kong machinery business, and Runxing contributed more than 100% of the net profit. Runxing benefited from the outbreak of mask machines at the beginning of this year, and we are optimistic about 3C orders from the second half of the year to next year. In June 2020, the company issued a convertible bond plan to build the second phase of high-end CNC machine tools in Chongqing, expand the production capacity of gantry machining centers, horizontal machining centers and high-precision machining machines, and strengthen competitiveness in aerospace, military, automotive and 5G communications.
The strategic entry of state-owned assets will help to take off. On August 7, the company issued a framework agreement on equity transfer. Weng Yaogen (chairman) and his concerted actor, Zhou Wenyuan (two shareholders, chairman of Runxing) plan to transfer 26% of his total shares to Sichuan Port and Aviation Investment Group or its designated affiliated party. The largest shareholder of Hong Kong Investment Group is Sichuan Transportation Investment Group, behind which is Sichuan SASAC. The transfer price is 7.14 the closing price the day before the suspension. The Port Investment Group has the wharf resources in the upper reaches of the Yangtze River, and Sichuan is an important strategic area for military industry and spaceflight. with the help of the resource and industrial advantages of state-owned capital, the company will achieve a second take-off in the field of traditional port machinery, military industry and aerospace machine tools.
Profit forecast: the company's net profit from 2020 to 2022 is expected to be 4.35,5.80 and 698 million yuan respectively. Compared with the listed companies of its peers, the company is currently valued at a lower valuation, covered for the first time and given a "buy" rating.
Risk hint: downstream customers' production expansion is not as expected, and stock transfer is uncertain.
