Event
The decision of the Ministry of Transport on revising the regulations on Motor vehicle maintenance Management was adopted at the 12th ministerial meeting on June 12, 2019, promulgated on July 8, and entered into force as of the date of promulgation.
Comment
The industry promotes the market-oriented operation mechanism, which is conducive to Jingu shares to vigorously develop the "new automobile retail". The title of Chapter 2 of the original provisions, "Business license", is revised to "Operation record". The new regulations stipulate: "those engaged in motor vehicle maintenance and operation shall, after going through the relevant registration formalities with the market supervision and administration agencies in accordance with the law, to the local road transport administration at the county level for the record. The road transport administrative agency shall put on record the maintenance and operation of motor vehicles in accordance with the regulations of the people's Republic of China on Road Transport and these provisions. The road transport administrative agency shall not collect fees related to filing from motor vehicle maintenance operators. "
The new rules are oriented to the non-4S store system, and the unauthorized auto repair chain brands, including "Auto Superman" (and a subsidiary of Jingu), are expected to further open the market, and the monopoly pattern of 4S stores may change. In the new regulations, Article 26 is changed to Article 25, and the fourth paragraph is revised as follows: "Motor vehicle production and import enterprises shall, within six months after the new models are put on the market, disclose to the public the maintenance technical information and man-hour quota of their production and imported motor vehicles. The specific requirements shall be carried out in accordance with the provisions of the relevant state departments on the disclosure of technical information on automobile maintenance. "
The auto repair market will eventually be standardized and transparent. The national auto repair chain brand represented by "Automobile Superman" may further integrate small and medium-sized enterprises and gradually establish a leading scale effect. The new regulations clearly define the responsibilities of operation filing and supervision, and add 19 new articles: "the road transport management agency shall publish to the public the list of motor vehicle maintenance operators that have been put on the record and update them in a timely manner, so as to facilitate social inquiry and supervision." At the same time, the blacklist system for operators and practitioners shall be established, and the road transport management agencies at the county level shall be responsible for determining the blacklist of motor vehicle maintenance operators and employees, and the specific measures shall be formulated separately by the Ministry of Transport. The new regulations further require enterprises to improve the "electronic health record system for automobile maintenance".
Investment suggestion
The new rules benefit the auto repair chain, and the market gives birth to high-quality leaders. The company joined hands with BABA in the automotive aftermarket layout of the "new retail" ecology, "Xinkangzhong" mainly by providing online traffic and supply chain warehouse capacity to become industry infrastructure builders, "Auto Superman" through information digital means to transform offline auto repair stores; at the same time, the manufacturing side company EPS environmental protection high-end equipment demand is tight, technology scarcity is strong, driving the growth of traditional business. Profit forecast: it is estimated that the return net profit of the company from 2019 to 2021 is 40 million yuan for 3.0 PE and 0.44 yuan for PE, respectively, and 0.53 yuan for PE in 2021, corresponding to the times of 28-19-16. Using the segment valuation method, it is estimated that the target market value of the company is 15 billion yuan (2.4 billion yuan for steel wheel manufacturing / 4 billion yuan for environmental protection equipment / 8.6 billion yuan for new automobile retail), maintaining the "buy" rating, and the target price is 14.83 yuan.
Risk hints: raw material price fluctuation risk; automobile market downside risk; automobile aftermarket competition risk.