加大零部件业务投入，助力业务多元化发展。公司可转债的新能源车辆建设项目、智能工厂二期项目所建设的厂房、新增的主要工艺设备均已投入使用并实现批量生产，后续预期投入较小。高端铸件基地项目主要生产工业车辆及工程机械配重类、动力传动箱/桥类和小型铸钢件三大类高端铸件，规划产能为年产20 万吨。我们认为，公司调配可转债募投资金用途，有利于充分发挥资金使用效率，助力业务多元化发展，加快满足公司“十四五”、“十五五”期间产能扩张的需求。Key points of investment:
Incident 1: Change the use of funds raised by convertible bonds. According to the company's “Notice Concerning Proposed Termination of Part of the Convertible Corporate Bond Fund Raising Project and Investing the Remaining Funds Raised into Other Fund-raising Projects”, the company plans to terminate the public offering of convertible corporate bonds, the “New Energy Vehicle Construction Project” and the “Smart Factory Phase II Project”, and change the estimated remaining capital raised from these two projects totaling 0.15 billion yuan to the “High-end Casting Base Project”.
Incident 2: Merger and acquisition of a complete machine production base and fork parts supplier. According to the company's “Notice on the Acquisition of All Shares and Related Transactions of Anhui Good Luck Machinery Co., Ltd. and Anhui Anxin Fork Co., Ltd.”, the company decided to acquire 65.15% of the shares of “Lucky Machinery” (one of the company's complete machine manufacturing bases) and 51% of “Anxin Fork” (the company's important fork parts supplier) held by He'an Electromechanical in cash.
Increase investment in the parts business to help diversify the business. The company's new energy vehicle construction project, the plant built in the second phase of the smart factory project, and the new main process equipment have all been put into use and mass production has been achieved, and subsequent investment is expected to be small. The high-end casting base project mainly produces three types of high-end castings for industrial vehicles and construction machinery, power transmission boxes/axles, and small steel castings. The planned production capacity is 0.2 million tons per year. We believe that the company's allocation of convertible bonds to raise funds will help make full use of the efficiency of capital use, help diversify business development, and accelerate meeting the company's production capacity expansion needs during the “14th Five-Year Plan” and “15th Five-Year Plan” periods.
The merger and acquisition of Sun Company, the controlling shareholder, consolidates and enhances its core competitiveness. The company's acquisition of all shares in Lucky Machinery and Anxin Fork held by Hean Electromechanical can, on the one hand, reduce the corresponding daily related transaction amount and further optimize the corporate governance structure, which is conducive to leveraging industrial chain synergy and enhancing market competitiveness; on the other hand, we believe it will help enhance the company's revenue and profit scale. With 2024Q1-Q3, Lucky Machinery achieved revenue of 1.232 billion yuan and net profit of 90.69 million yuan; Anxin Fork achieved revenue of 0.187 billion yuan and realized net profit of 7.02 million yuan.
Profit forecast. We expect the company to achieve operating income of 17.85/20.184/22.625 billion yuan in 2024/2025/2026, +2.17%/+13.08%/+12.09% year-on-year, and achieve net profit to mother of 1.417/1.662/1.932 billion yuan, an increase of 10.85%/17.33%/16.21% year-on-year. We gave the company a PE valuation of 13-15 times in 2024, with a reasonable value range of 20.68-23.86 yuan/share, and a reasonable market value range of 18.4-21.3 billion yuan, giving it a “superior to the market” rating. Referring to the PB valuation, according to our reasonable value range, the company's 2024 PB was 1.76-2.03 times (the comparable company PB range in 2024 was 1.78-2.23 times), and the valuation is reasonable.
Risk warning. The construction of convertible bond raising projects fell short of expectations; the recovery of the manufacturing industry fell short of expectations; the risk of fluctuations in raw material prices; and the risk of exchange rate fluctuations.
