Event

On August 23, the company issued an announcement on the change of the actual controller. Mr. Zhang Min, the actual controller, completed the transfer registration of the equity transfer between Mr. Zhang Min and excellent Automobile. After the completion of the equity change, excellent Automobile held a total of 40 million shares, accounting for 8.53% of the total share capital. Mr. Zhang Min holds 12% of the remaining listed company corresponding to the voting right. In addition, excellent Automobile United Action Man Hanjiang equipment holds 4.27% of the listed company. Excellent Automobile expanded its voting influence at the shareholders' meeting to 24.81% of the total share capital and became the company's controlling shareholder.

Brief comment

High premium acquisition demonstrates excellent automobile's confidence in the company's development prospects.

This agreement transfers 18 million shares for 400 million yuan, and the transfer price reaches 22.27 yuan per share, which is higher than the share price premium, which reflects excellent Automobile's confidence in the operating status and future development prospects of the listed company.

Excellent automobile is the leader of special purpose vehicle manufacturing, and the transformation direction forms a synergistic effect with the company.

Excellent Automobile currently holds a 90% stake in Chusheng Automobile. Chusheng Automobile is the leading manufacturer of special-purpose vehicles in China. The sales of special-purpose vehicles in 2017 and 2018 were 1.14 and 13400 respectively, with operating income of 1.084 billion yuan and 1.267 billion yuan and net profit of 18.1405 million yuan and 36.5437 million yuan respectively. Excellent automobile is transforming to the direction of new energy, intelligence and lightweight, which is expected to form a synergistic effect with founder motor business.

The traffic control power of CRRC appears, and the cooperation of the follow-up large industry platform is worth looking forward to.

(1) Outstanding Automobile, the shareholders are Deqing CRRC Green vein New Energy Investment Center (hereinafter referred to as Deqing Fund) and Shanghai Zhong Zhen Traffic equipment Co., Ltd. (hereinafter referred to as CRRC Traffic), while Deqing Fund and Zhong Zhen Traffic have a joint shareholder, CRRC City Transportation Co., Ltd. (hereinafter referred to as CRRC Traffic), and the general partner and executive partner of Deqing Fund is CRRC Green vein, and the controlling shareholder of CRRC Green vein is CRRC Traffic.

(2) CRRC Communications is a mixed ownership enterprise initiated by CRRC Corporation Group in cooperation with local state-owned assets and strategic investors. it is positioned as a test field for state-owned capital investment, a pathfinder for business model innovation and a carrier for CRRC brand export. The company has achieved rapid growth in the past three years, with revenue of 17.2,42.8 and 11.27 billion yuan and total assets of 5.5,13.8 and 2.75 billion yuan respectively from 2016 to 2018. The company's main business is to provide overall urban low-energy public transport solutions, including rail transit, trolley buses, bus BRT, new energy public transport, intelligent parking garages, charging facilities, etc., including the overall planning, R & D and customization, investment construction, operation and maintenance and other integrated services of three-dimensional public transport system.

(3) in terms of industrial coordination, founder Motor New Energy Drive Motor series products have established supporting cooperative relations with SAIC, Yuchai Group, Geely Automobile and other domestic new energy vehicle enterprises. The independently developed new energy system drive integration project has achieved mass production. After the completion of the acquisition, the company will obtain the CRRC transportation industrial platform, Deqing Kaikai government platform recommendation and endorsement. In particular, priority will be given to obtaining orders for electric drive system integration and low-emission technology products under the CRRC transportation system, and it is expected to obtain more high-quality customers and orders.

(4) in terms of R & D coordination, CRRC Traffic, the main shareholder of Outstanding Automobile, and Tongji University are expected to jointly build the CRRC Rapid Transit Research Institute to provide R & D technical guidance and support for listed companies, and help listed companies introduce high-level technical personnel.

(5) in terms of strategic coordination, Outstanding Automobile aims to establish the global design and sales headquarters of new energy special vehicles and the core manufacturing base of "oil to electricity". After the acquisition, it will achieve resource sharing and complementary advantages with listed companies. further enhance the profitability of listed companies.

Continue to increase the motor business of new energy vehicles, release the potential of high-quality customer resources support

The company embraces the changes in the market of new energy vehicles, continues to promote the research and development and mass production of electric drive integrated systems, and develops and distributes flat-line motor products. The company plans to increase the annual output of 350000 new energy vehicle drive motors and electric drive integrated system projects, and continue to increase the motor layout of new energy vehicles. As a leading enterprise in the domestic new energy drive motor and electric drive system industry, the company has a comprehensive market share of nearly 7%, and the market share of logistics vehicle assembly products ranks first in the country. The company's drive motor products cover a full range of electric vehicles, such as passenger cars, logistics vehicles, low-speed cars and buses, and have entered Wuling, Geely, Zhongtai, Dongfeng, Yuchai, Yutong, Yujie and other supporting systems. The company successfully broke into Geely's supply chain, marking the expansion of the company's passenger car motor supply model from A00 class to A class. Excellent customer resources form a strong support for the company's revenue explosion.

Profit forecast

We expect the company's revenue from 2019 to 2021 to be 1.404 billion yuan, 1.622 billion yuan and 1.961 billion yuan respectively, and its net profit to be 57 million yuan, 107 million yuan and 150 million yuan respectively. The current stock price corresponds to 45.47,24.20,17.27 times of PE. Maintain a "buy" rating.