The Baling Investment Fund received an increase in capital and set up Baling Gaia to speed up the transformation. According to the announcement of the company on December 1, the company and its senior executive Mr. Huang Shengtian planned to increase the capital of Shenzhen Qianhai Baling Investment Fund Partnership by 200 million yuan according to their respective investment ratio, including 190 million yuan for the company and 10 million yuan for Huang Shengtian; at the same time, Baling Investment plans to attract no more than 8 partners, with a total capital contribution of no more than 800 million yuan. On the same day, the company announced that Baling Investment Fund, Gaiya Network and Mr. Wang Yanzhi contributed a total of 195 million yuan to establish Qianhai Baling Gaiya Investment Management Co., Ltd. (Baling Investment Fund 66.66%, Wang Yanzhi 33.33%).
Baling Gaia focuses on entertainment and cultural investment to create a new main business with high growth. Baling Gaia will focus on investing in assets such as equity in the entertainment and cultural industry, such as online games, which will become an important expansion attempt of the company's third main business. The company's non-public offering was approved on November 23 and is now in good financial health, low asset-liability ratio, abundant cash on hand, and highly clear follow-up transformation.
Short-term VR theme is strong, medium-term optimistic about growth potential. The company's existing assets include auto parts, cultural performing arts, and potential online games in the future. Among them, cultural performing arts assets include theme performance "impression of Shajiabang", sci-fi theme performance "lost Dinosaur", and future online game investment. On the one hand, the market maps the company as the VR theme, which is expected to be relatively strong in the short term; on the other hand, based on the theme performance, the company is optimistic about its growth in the medium term.
Profit forecast and investment advice. The prosperity of the automobile industry fluctuates, there is local overcapacity in the parts sub-industry, and the performance may be under pressure. The company seeks to increase its equity value in the future, and plans to enhance its long-term growth through more mergers and acquisitions, new business development, and layout diversification strategy; at the same time, the company's financial health, abundant funds, and highly clear follow-up transformation will steadily boost the company's market capitalization through continuous industrial layout events, automobile lightweight, cultural industry opportunities, etc. It is estimated that the EPS from 2015 to 2017 will be 0.53,0.82,1.18 yuan, corresponding to the closing price PE of 107,69,48 times respectively. The target price is 70 yuan, corresponding to 86 times PE in 2016, maintaining the buy rating.
Risk hint. The prosperity of the automobile industry fluctuates. The transformation business is advancing less than expected.
