Event: the company signed an "investment contract" with natural persons Chen Wenkai, Yuan Tao and Shanghai car maintenance worry-free Electronic Commerce Co., Ltd., intending to acquire 20% equity of car maintenance through capital increase with its own capital of 62.1 million yuan.

Investing in e-commerce in the automotive post-market has brought sustainable profit growth: car maintenance www.51.com, established at the end of 2012, is an e-business for car maintenance services that provides online maintenance O2O services. its core competitiveness is to purchase authentic products from the source and provide them to end consumers at prices lower than 4S stores. Car care brand providers include Bosch, Castrol, Mobil and other international well-known brands. After more than two years of development, car maintenance worry-free has accumulated a leading domestic maintenance and accessories database. At present, the platform has more than 1 million registered users, of which the average daily UV is nearly 100000, and the number of specially contracted installation service merchants has reached 1200 (260in Shanghai, more than 540in Jiangsu and Zhejiang respectively). It is expected that the number will reach 3000 by the end of this year and more than 10,000 in 2016. Since the first quarter of 2015, the company has begun to expand its users and regions, and its revenue has increased significantly, growing by 300% year-on-year and more than 15% month-on-month. It is expected that the annual sales revenue will increase by 5-8 times by the end of 15 years.

The demand for the post-car market will rise, and there will be huge space under the pain points: the number of cars in China is expected to reach 150 million in the past 15 years, and the blowout growth in the early stage of the automobile industry has brought huge space for the post-car market at the present stage. at present, the average age of 90 million passenger cars in China is about 3.5 years, and the demand for automobile service will gradually shift from 4S stores to independent markets. Therefore, we judge that 15 years will be the first year of automobile independent market demand and there is a lot of space, which is mainly reflected in two aspects: a large number of users trillion space, and the Er4S store market is now twice as large as the independent market. We judge that this figure will be reversed later. At present, the market is mainly based on the 4S store model, there are layers of price increases and services are not open and transparent and other industry chaos, while after the independence of the market, there are poor service quality, lack of standard rules and other problems restrict the development of the automobile post-market. Considering that e-commerce in the automotive aftermarket will play an important role in disintermediation, cost transparency and user experience improvement, which can bring a win-win situation among car owners, parts manufacturers and automobile service stations, so we are optimistic about the development of this field.

The main business has grown steadily, and the automotive aftermarket has brought room for imagination, giving it an "overweight" rating: the company's main products are sunshade fabrics and sunshade products, and it has achieved a substantial increase in revenue and net profit in the past 14 years. Sales in exports and domestic sales have increased steadily. In addition, the company has completed the merger and acquisition of Australian KRS (channel provider) in 14 years. KRS will help the company to carry out overseas business, expand sales channels, as well as overseas M & A platforms to seek peer M & An opportunities in Australia and New Zealand to realize the transformation from "manufacturing" to "creation". While tamping the main business, the company enters the blue ocean of the automobile rear market by increasing capital to maintain the car carefree net, laying the groundwork for the company's follow-up development. We estimate that the company's 15-and 16-year EPS will be 0.25 and 0.29 yuan, with an overweight-A rating and a target price of 45 yuan.

Risk hint: the progress of e-commerce in the automobile aftermarket is slow.