Event description

Zoomlion Heavy Industry Science and Technology issued an announcement that the company and Lu Chang Science and Technology signed the "Major Asset reorganization intention Agreement of Shenzhen Luchang Science and Technology Co., Ltd.". Lu Chang Technology plans to issue shares to purchase 100% of the holding subsidiary of the company, Zoomlion, and raise supporting funds.

Event comment

It is proposed to spin off Zoomlion to go public, promoting the continuous growth of the high-tech sector and realizing a revaluation. According to the announcement, the company intends to spin off the holding subsidiary Zhonglian High-tech, through restructuring with Lu Chang Technology to achieve the listing of the high-tech plate. The original main business of Lu Chang Technology is Automotive Electronics, etc. As of the third quarterly report of 22 years, the company controls Lu Chang Technology and holds 53.82% of its equity. At the same time, the company holds 61.43% of Zoomlion Gaoji. At present, the transaction is still in the early planning stage. If the restructuring is completed, we think: 1) the high-tech sector that has continued to increase rapidly in recent years is expected to further expand and become stronger with the help of the platform of listed companies. Better grasp the continuous growth and huge space of the high-tech market, and strengthen the leading position 2) the holding company Lu Chang Technology "Automotive Electronics + aerial work platform" goes hand in hand, which is expected to promote the revaluation of the high-plane plate.

High-tech business has become a leader in the industry from newcomers, and has continued to grow rapidly in recent years. High-speed business is a potential new business newly cultivated by Zoomlion Heavy Industry Science and Technology in recent years, but thanks to the company's products, technology leadership and Zoomlion's key resources input, high-speed business has grown strongly. According to the company's disclosure, the company achieved 3.351 billion yuan in sales of aerial work platform in 21 years, a year-on-year increase of 310.76%. Its domestic market share has risen to the first place in the industry in 22 years, and it is expected that it will continue to increase rapidly in 23 years under the background of simultaneous efforts at home and abroad. 1) on the product side, Zoomlion, as the leader of lifting appliances, has profound technical accumulation and increased investment in research and development of high-altitude machinery. at present, the company's aerial working machinery has achieved full coverage of 4-68 meters, becoming the domestic manufacturer of the most complete models of high-altitude equipment; arm truck products are sold in bulk and developed the world's highest electric arm vehicle with an operating height of 40 meters. Complying with the trend of electrification, the company's electric drive arm products already have the most complete spectrum in the industry, and according to official account, new energy products currently account for about 60% of sales. 2) the sales market has made efforts both at home and abroad, and the domestic market has become the leader, while the overseas market has focused on expanding its coverage from 58 countries and regions in 21 to 71 in the first half of 22. Achieve a three-dimensional breakthrough of "agents + major customers + end customers" in key market countries and regions, and the products have entered high-end markets such as Europe, the United States, Canada, Australia and so on. And cooperate with large leasing companies and end customers in all regions of the world. 3) the expansion of intelligent factory capacity supports sales expansion. In the first half of 22, the company's high-machine intelligent factory realized the off-line of arm-type assembly line products, which will strongly promote the release of high-value arm trucks; at the same time, aiming at the key European markets, the company's European plant was completed in Italy in 21 years, including high-rise machines, tower cranes, car cranes and other products to achieve local production and sales.

The steady growth policy helps demand to usher in a marginal inflection point, and profit flexibility is expected. Under the background of 23 years of steady macroeconomic growth, the implementation of the policy of stable growth of infrastructure and real estate is worth looking forward to, especially the real estate that has dragged down the demand more is expected to be improved under the protection of the policy. The overall demand environment for construction machinery in 23 years is better than 22 years. The company's traditional advantage plate concrete machinery, lifting machinery is expected to gradually reverse the decline of 22 years, at the same time, the emerging plate of excavators, agricultural machinery, high machinery and other business progress good contribution increment, overseas business as a key direction in recent years is expected to continue the high growth trend. From the profit side, 23 years of earnings flexibility can be expected with the full play of economies of scale, optimization of business structure and expectations of major price cuts. It is estimated that the company's 22-23 net profit will be 25.05 yuan and 4.906 billion yuan respectively, corresponding to 20X and 10X PE respectively. Under the catalysis of stable growth policy, the leader is expected to usher in repair and continue to give a "buy" rating.

Risk hint

1. The policy of stabilizing growth is lower than expected.

2. the progress of overseas market development is not as expected, and the competition in the domestic market is intensified.