Huahong Technology (002645): Dingzeng Approved to Promote the Deployment of Renewable Resources Leaders
Dingzeng was approved to acquire Xintai Technology and continued to increase the layout of renewable resources.
The company announced on January 23 that the project for increasing projects was approved by the China Securities Regulatory Commission and will be 8 years old.
100 million acquisition of 100% equity of Xintai Technology, of which 5.
10,000 yuan is paid by the company by issuing shares, and the price of the shares is 7.
7 yuan, and additional matching funds not exceeding 3.
18 ppm for cash consideration for transactions.
The performance promise 无锡桑拿网 of this transaction: in 2020-2022, the actual net profit will not be less than 0.
970,000 yuan, corresponding to PE9.
Xintai Technology has a market share of about 20% in the comprehensive utilization of rare earth waste. The production process is leading in the industry. It mainly produces high-purity rare earth oxides through neodymium iron boron waste and phosphor waste. The products can widely use magnetic materials, computers, and communication equipment.High-tech fields such as three primary color phosphors.
At present, Xintai Technology has a production capacity of 2958 tons of rare earth oxides. We increase production by 85% of production capacity, and the net profit accessibility per ton in 20203.
4 million, we believe that due to the upcoming expansion of 5G, downstream demand for 北京男士会所 computers, communications equipment and other components may explode, while the supply of rare earth oxides is relatively limited, the industry ‘s prosperity will rise, and if the remaining price rises, Xintai Technology’s profit will beThere is upside.
The dismantling policy is favorable, the technical specifications are implemented, or a new era in the industry is started.
1. On May 6, 2019, the State Council promulgated the “Administrative Measures for the Temporary Recycling of Scraps”, which came into effect on June 1.
We think the impact: 1) The five major assemblies can be directly recycled, the profit of dismantling enterprises is expected to increase, and the incentive to invest and recycle scrapped cars is increased.
2) Liberalization of industry access will attract new investors to enter the market, and demand for automotive dismantling equipment is expected to increase.
At present, the annual automotive dismantling market size is 6.6 billion US dollars. In the future, the automotive dismantling market size is expected to reach 110 billion US dollars (of which 70 billion US dollars are the “big five assembly”), and the company’s downstream potential growth space is about 16 times.
2. On December 17, 2019, the General Administration of Market Supervision and the National Standards Commission approved the release of the “Technical Specifications for Disposable One-Time Recycling and Dismantling Enterprises.” We believe that the documents clearly define the facilities, venues, and minimum annual dismantling of dismantling enterprisesProduction capacity may start to integrate and upgrade the industry in 2020, and the company is expected to benefit significantly.
97.7 million yuan for land purchase and in-depth car dismantling.
In September 2019, the company announced that Zhongwubo, a subsidiary of the company, auctioned Beijing’s industrial land for 97.7 million yuan.
40,000 square meters for production and operation.
We believe that Beijing’s car ownership in 2018 was 6.08 million, corresponding to a breakthrough in scrapping volume, and only 8 scrapping enterprises. After the land purchase was completed, China Wubo has met the 20,000 square meters of land requirements. Considering the company’s equipment advantages and favorable industrial policies,According to the annual dismantling volume of 40,000 vehicles, the net profit of bicycles is 800-1000 yuan, and China Wubo may contribute 0.
With a net profit of 400 million yuan, through the implementation of the new policy, both volume and price can be expected to rise, and performance after production is significantly improved.
Estimates and recommendations.
We expect the company’s EPS to be 0 in 19-21.
88 yuan, corresponding to 19 times PE in 19 years, 19 times the median PE in the industrial machinery industry is 32 times, the average is 41 times, and the average PB is 3.
5 times, other special equipment industry 19PE median 40 times, average 50 times, PB average 3.
As a leader in the automotive dismantling industry, facing the excellent industry opportunity to liberalize market access in the industry, we believe that the market space may grow significantly in the next few years, and the company’s profit growth rate will exceed the machinery industry growth rate.24-26 times PE, corresponding to a reasonable value range of 10.
7 yuan, 19Q3BPS is 4.
16 yuan to the company 2.
0 times PB, corresponding to a reasonable value range of 11.65-12.
Taken together, the company’s reasonable value range is 10.
48 yuan, maintain the “primary market” rating.
Risk reminder: The market demand for automobile dismantling is less than expected, and the rare earth resource recycling business is not as expected.