Core ideas:
1. Event
The company issued an employee stock ownership plan, with a total share of no more than 60,000 and a total fund-raising of no more than 6 million yuan.
two。 Our analysis and judgment
(1) the performance declined in the first three quarters, and short-term fluctuations were not enough to fear.
Revenue in the first three quarters of 2017 was 12.894 billion, up 16.72% from the same period last year, and the net profit belonging to shareholders of listed companies was about 100 million, down 43.63% from the same period last year. The main reason is that due to the influence of supply-side reform and environmental protection production restrictions, the price of aluminum, the raw material of the company's products, has risen too fast in a short period of time, which has an impact on the normal production rhythm of the company and greatly lowers the gross profit margin of the products. However, we believe that the rise in aluminum prices is not sustainable in the short and medium term. With the end of production restrictions and the slow transition from the supply side to the demand side, the fluctuation of raw material prices will gradually stabilize, and the company's operation is expected to return to the normal pace. Stable performance growth is expected.
(2) merger and acquisition of Jinyuan Copper, the layout of special cables and the next city
The company completed the acquisition of 64% stake in Jinyuan Copper in the fourth quarter. After the acquisition, the company will increase the production capacity of low-oxygen bright copper rods and quickly enter the field of special precision conductors such as high-end electromagnetic wires and enamelled wires. At the same time, relying on Jinyuan Copper's many years of copper rod production experience, technology and cost advantages, this merger and acquisition will help the company to develop special high-end cable business such as aerospace conductors. to further consolidate and improve the company's market share in aerospace and other special high-end cable segments. We believe that the company relies on the military industrial group, and the development of military special cables has a first-mover advantage, and the accession of Jinyuan Copper will add to the development of the company in this field.
(3) join hands with BABA to start a new journey of win-win cooperation
Recently, Baosheng of the aviation industry signed an omni-directional cooperation agreement with BABA, ranging from enterprise procurement to online marketing to enterprise logistics. This move is expected to open up the company's online and offline circulation links, and greatly promote the development of related businesses such as enterprise procurement, online marketing and enterprise logistics.
(4) the positioning of the group is clear, and employee stock ownership will add to the development force.
AVIC, the actual controller, is the largest aviation military products manufacturing enterprise in China, and the company is currently positioned as a large-scale key supported civilian products enterprise in the group. With the continuous expansion of the company's size and technological breakthroughs in the field of aviation cables, we believe that the company will benefit significantly in terms of financing costs and expansion of the aviation cable market. The recent introduction of the employee stock ownership plan demonstrates the company's confidence in development, and future performance growth is expected to enter the fast lane.
3. Investment suggestion
It is estimated that the company's net return profit from 2017 to 2019 is 160 million, 230 million and 290 million respectively, and the EPS is 0.13,0.19 and 0.24 yuan, respectively. The current share price corresponds to 39x, 27x and 21x. "epitaxial + endogenous" two-wheel drive, the company's value is expected to gradually highlight, maintain the "recommended" rating.
Risk Tip: the risk of raw material price fluctuations exceeding expectations.