Events: on January 15, Shandong Jingda signed the "share transfer Framework Agreement" and the "Voting Rights delegation Agreement" with Wang Donghui and Wu Min, and planned to transfer 8% of Ronglian's shares and 17.66% of its voting rights in batches. On January 16, Ronglian Technology issued the "preliminary Plan for the non-public offering of A shares", which intends to issue no more than 102710027 shares to Shandong Jingda and raise no more than 379 million yuan.
The controlling shareholder of the company will be changed to Shandong Jingda, and the actual controller will be changed to the state-owned capital management office of Jining High-tech Zone, which is expected to effectively alleviate the company's asset impairment and subsidiary goodwill storm plight in 2020. Affected by industry policies, changes in the market environment and the epidemic situation of COVID-19 in the past 20 years, the company is facing impairment of assets and goodwill of subsidiaries. As a result, we have lowered our performance forecast. After the completion of the share transfer and non-public offering of the company's wholly-owned subsidiary, Shandong Jingda will achieve control by directly holding 20.23% of the company's shares, and its actual controller, the State-owned assets Office of Jining High-tech Zone, will become the actual controller of Ronglian Science and Technology. Wang Donghui and Wu Min hold 11.84% of the company's shares, and the change of major shareholders is expected to alleviate the company's predicament.
The new controlling shareholder will provide financial support for the digital transformation business development of Ronglian Science and Technology. Shandong Jingda, as the controlling shareholder, promised to provide no less than 1.5 billion yuan of financial support to the company in the next three years by providing entrusted loans, guarantees, shareholder loans and subscribing for additional shares, to help the company optimize its business layout, talent introduction, R & D investment, etc. The non-publicly raised 379 million yuan will be used for liquidity replenishment and hybrid multi-cloud service operation support platform research and development and industrialization projects at the same time.
The background of the new controlling shareholder, state-owned assets, will help the company to develop the government data market. Previously, the company's customers were mainly concentrated in the financial sector, accounting for more than 55% of revenue. Other customers have low revenue, and neither the top telecom customers nor government customers contribute more than 15%. The entry of Shandong Jingda, which has the background of state-owned assets, may help it to open up the government data market and bring it more possibilities for cooperation in government projects.
Company profit forecast and investment rating: we expect the company's net profit from 2020 to 2022 to be-8.70,0.56 and 87 million yuan respectively, corresponding to EPS of-1.30,0.08 and 0.13 yuan respectively. The current stock prices correspond to PE values of -, 48.34 and 31.27 times from 2020 to 2022, respectively. Be optimistic about the reversal of the company's predicament, the change of major shareholders will bring momentum, and maintain the "recommended" rating.
Risk hint: the impact of COVID-19 epidemic and the intensification of competition in the industry exceeded expectations; the introduction of war investment by the company was not as good as expected.