Plan to increase fund-raising supporting Geely, deep ploughing automobile lightweight has a bright future.
Event: the company recently issued a non-public offering plan to issue no more than 52 million shares to no more than 10 specific investors, with a total amount of no more than 800 million yuan, with a lock-up period of 12 months.
Comments:
Plan to raise more funds to build a production base in Yiwu, supporting Geely to expand automobile lightweight business. According to the company's announcement on March 22, the company's subsidiary Haiyuan New Materials and Geely New Energy signed a letter of intent to build a production base in Yiwu to provide Geely with the production of lightweight accessories. The first phase plans to put into two automotive SMC lightweight products and LFT-D lightweight products production lines with a standard production capacity of 400t / a, as well as two carbon fiber production lines. The second phase plans to invest four SMC lightweight products production lines and four carbon fiber production lines. After deducting the issuing expenses, all the funds raised will be used for the project of Yiwu production Base of Automotive lightweight Composite parts, with an implementation period of 24 months. The construction site of the project is close to Geely New Energy vehicle Plant, which will further close the relationship with customers, help the company to rapidly expand its sales channels and enhance its future development space.
Have the advantages of the whole industry chain of composite materials, and actively expand downstream applications. Relying on the leading advantage in composite equipment, through the integration of domestic and foreign resources, the company has built a complete industrial chain from composite equipment, process, materials, mold development, product design to product production. The company is actively extending the industrial chain and expanding the downstream applications of composite materials, with automobile lightweight and construction lightweight as the main strategic direction. According to the plan, the company has cooperated with Yutong bus, Dongfeng Liuqi and other automobile companies to develop and supply a number of parts, at the same time, it has also reached a number of fixed-point agreements and batch supply of projects with Ningde era. In terms of building lightweight, the company's composite building formwork is the first to be developed and produced in China, and has been rapidly rolled out in subway projects, urban underground pipe corridors, real estate and other public and housing construction.
The lightweight of cars is imperative, and the company has broad business prospects. With the popularization of new energy vehicles and the strictness of vehicle emission policy, automobile lightweight is imperative. The roadmap for energy-efficient and new energy vehicle technology points out that the weight of the whole vehicle will be 10%, 20% and 35% less in 2020, 2025 and 2030 than in 2015, respectively. The National Development and Reform Commission has also listed the development of non-metallic composites as the first of the key development areas of lightweight materials for new energy vehicles. With its sufficient technical reserve and business layout, the company will deeply benefit from the automobile lightweight and broad market space in the future.
Investment suggestion: the company has the advantages of the whole industry chain of composite materials, and there is a broad space for downstream applications to expand and grow. It is estimated that the company's EPS from 2018 to 2020 will be 0.30,0.93 and 1.22 yuan respectively, maintaining the "buy-A" rating with a six-month target price of 20.70 yuan.
Risk tips: audit risk of additional issues; risk of downstream customer demand fluctuations