Event: recently, Haili shares released the financial statements of Haili Marelli 2020. Haili Marelli achieved an income of 4.2 billion yuan and a performance of-430 million yuan in 2020. Previously, Haili shares took Haili Hong Kong, a wholly-owned subsidiary, as the main body of the acquisition, and acquired 60% of Haili Marelli (formerly Marelli Hong Kong) from Marelli in cash. Under the deal, Marelli spun off and reorganized its assets and businesses related to automotive air-conditioning compressors and automotive air-conditioning systems, and established Marelli Hong Kong as the main body of the integration of target assets and businesses.
On January 28, all the delivery conditions agreed upon for the acquisition (except for the approval of foreign direct investment in India) have been met, and Haili has paid US $170 million for delivery.
Accelerated layout of auto parts plate: Marelli Hong Kong was established by Marelli with the divestiture and reorganization of its assets and businesses related to automotive air-conditioning compressors and automotive air-conditioning systems. its main customers include Nissan-Renault-Mitsubishi Alliance, Honda, General Motors, Suzuki, etc., covering Japan, China, Europe, America and other world leading automotive manufacturers, in the global leading position. In addition, this acquisition agreement promises that the annual return net profit of Hailimarili from 2021 to 2023 shall not be lower than the equivalent amount of "actual paid consideration / 60% × 6%" (that is, 6% of the enterprise value of Marelli Hong Kong determined on the delivery date). The total performance compensation is capped at US $65.92 million, which provides a high performance guarantee for the acquired operation.
Through this acquisition, Haili will become one of the enterprises with complete new energy vehicle heat pump air conditioning system solution capabilities. and will have a global layout of automotive compressor and air-conditioning system business as well as the world's leading R & D capabilities and customer resources. According to Haili Financial report, affected by the decline in domestic brand passenger car sales in 2020, Haili New Energy's automotive electric scroll compressor sales YoY-40.0%;2020Q1 is affected by automotive chips and product launch cycle, and its automotive electric scroll compressor sales YoY-55.5%. We believe that Haili's existing electric vehicle air conditioning compressor business is expected to form a synergistic effect with Marelli's automotive air conditioning system, heat pump module, compressor and related components, provide complete environmental system solutions for new energy vehicles, achieve global integration of customer resources, help to promote the rapid expansion of Haili in the field of auto parts, and enhance the company's competitiveness and profitability.
Investment suggestion: Haili shares are the dominant brand in China's rotor compressor industry and maintain a leading position in the non-self-supporting market. In recent years, the company has actively laid out the field of new energy auto parts and is expected to achieve diversified growth. We estimate that the company's EPS in 2021-2023 will be 0.27-0.35-0.42 yuan, with an investment rating of buy-A, with a 6-month target price of 11.34 yuan, corresponding to a 2021 PE valuation of 42x.
Risk hint: the price of raw materials has risen sharply, the competition in the industry has intensified, and the effect of acquisition integration is not as good as expected.
