\u3000\u3000 Wuxi Longsheng Technology Co.Ltd(300680) (300680)
Event:
Wuxi Longsheng Technology Co.Ltd(300680) issued a private placement announcement: it plans to raise 716 million yuan from no more than 35 investors to expand the production capacity of motor iron core, and the subscription amount of the actual controller of the company is 20 ~ 50 million yuan.
Key investment points:
The actual controller participated in the fixed increase fund-raising to demonstrate the development confidence of the company. The company and Lihu sub district office of Binhu District, Wuxi City signed the investment agreement on the R & D and manufacturing project of core parts of new energy efficient and high-density drive motor system, with a total investment of about 2 billion yuan. The investment in the first phase of the expansion project is 888 million yuan. The company plans to raise 716 million yuan through fixed increase, and the rest will be invested with its own funds. The actual controller of the company plans to participate in the fixed increase by subscribing 20 ~ 50 million yuan in cash.
The company expanded the core capacity of driving motor of new energy vehicles and accelerated the release of performance. The general office of the State Council issued the new energy vehicle industry development plan (2021-2035), which pointed out that by 2025, the sales penetration rate of new energy vehicles will reach about 20%. As the core component of the drive motor, the iron core is growing rapidly with the rapid growth of new energy vehicles. The demand for iron core of drive motor of different new energy vehicles is different, and the switching of production line will take a lot of time. Therefore, the company plans to increase the production line of iron core products to improve production efficiency and better meet the demand of downstream market.
The company's net profit increased significantly in 2021, mainly benefiting from the rapid volume of motor core and EGR system business. The company's main sales products are EGR system and stamping parts. Benefiting from the upgrading of national six emission standards, the promotion of passenger vehicle hybrid technology route and the rapid growth of production and sales of new energy vehicles, the sales volume maintained a high growth. In 2021, the net profit attributable to the parent company was 95 ~ 110 million yuan, with a year-on-year increase of 77% ~ 105%.
Profit forecast and investment rating we are optimistic about the company's expansion of iron core capacity. With the continuous growth of downstream application demand, the company's expansion is expected to accelerate the release of performance. Based on the principle of prudence, the impact on the company's performance will not be considered until the private placement is completed. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be 104 / 258 / 353 million yuan respectively, with growth rates of 94% / 148% / 37% and corresponding PE of 48x / 19x / 14x respectively. It will be covered for the first time and given a "buy" rating.
Risk warning: the implementation of national VI emission standard is lower than expected; The sales growth of new energy vehicles was lower than expected; The promotion of private placement was less than expected; The development of new products is less than expected; Intensified industry competition, etc.
