On February 2, the company announced that the second largest shareholder, Lianzhong Li & Fung, increased its shareholding to 12.14%, and the company determined that it had no controlling shareholder and actual controller. With the transfer of controlling shares from state-owned assets and the improvement of management shareholding, the market-oriented characteristics of the company are more obvious, and the growth rate is expected to increase under high vitality. Maintain the buy rating.
Support the main points of rating
The second shareholders are optimistic that the cumulative increase in shareholdings will change the controlling shares. Lianzhong Li & Fung, the second shareholder of the company, is the management shareholding platform. Based on the optimistic prospects of the company, it has increased its shareholding by about 18.4 million shares from December 18, 2020 to January 28, 2021, increasing the shareholding ratio to 12.14%, which is close to that of Weihai Electric Group (under Weihai SASAC), which is 13.93%. After a comprehensive consistent actor relationship, it is concluded that the company has no controlling shareholders and actual controllers. The state-owned assets have not been withdrawn, but the holding structure is optimized, which will be more market-oriented in terms of operation and management, investment and financing, and employee incentives, so as to stimulate the vitality of enterprises.
Large buybacks also reflect a high degree of certainty in the acceleration of business development. Since November 2020, the company has announced the increase of individual management and shareholding platform, reflecting the confidence in the company's long-term development prospects. In 2020, the business was affected by the epidemic, but overseas recovered rapidly in the second half of the year, the domestic innovation business grew rapidly, and the superimposed vitality of enterprises is expected to boost the performance. We believe that the high growth in 2021 is strong and the performance inflection point is clear.
Innovative businesses such as logistics automation and new retail operations may exceed expectations. Compared with the traditional business, the company still ushered in new business development opportunities in 2020, including the automatic sorting system of intelligent logistics, the operation of new retail terminals and the transformation of intelligent financial outlets. Logistics and new retail businesses will change the dependence of key customers while improving revenue, profit and cash flow indicators. The industry is in the stage of rising penetration, and business development is expected to exceed market expectations in 2021.
Valuation
It is estimated that the net profit in 2020-2022 is 330 million, 470 million and 620 million yuan, and the EPS is 0.50,0.71 and 0.93 yuan (adjusted according to the pace of business recovery after the epidemic), corresponding to PE of 20 times, 14 times and 11 times. The company's texture changes, the undervaluation is far from reflecting the actual value, and the buy rating is maintained.
Main risks faced by rating
The epidemic situation is repeated; the development of new business is not as expected.
