Zhejiang Dun'An Artificial Environment Co.Ltd(002011) (002011)
The reply to the letter of concern was smooth, and the uncertainty decreased significantly:
1) For the related party guarantee of Dunan holdings, an estimated loss of 630 million yuan has been withdrawn in the 2020 annual report, and the guarantee has not been transformed into an inevitable liability of the listed company; In the future, all parties will actively coordinate to reduce the possibility of actual commitment of the listed company. In case of actual commitment in the future, the listed company has the right to recover from Dunan holdings;
2) The equity transfer and fixed increase plan have been approved by the debt Commission and relevant superior departments in procedure, and the follow-up needs to pass the antitrust review; In addition, the equity transfer still needs the compliance confirmation and registration transfer of Shenzhen Stock Exchange, and the fixed increase matters still need the deliberation of the general meeting of shareholders and the approval of the CSRC.
The short-term stock price correction is in place, and the trend and pattern of refrigeration + heat management industry are clear: after share transfer and fixed increase, it is conducive to the coordinated development of the company and Gree and boost the development of the company's refrigeration accessories business; At the same time, the competitiveness of the company's new energy vehicle thermal management business can be effectively improved through Gree's industrial status, capital and resources. The threshold of vehicle electronic expansion valve is high. In the future, it is expected to follow the household refrigeration pattern, form a duopoly of Sanhua and Dunan China, improve Dunan heat management product line, and increase the proportion of heat pump models, which will bring significant industry expansion and single vehicle value.
The business inflection point is clear, and there is a large space for profit tapping: the scale of refrigeration revenue of the company is basically the same as that of Sanhua, the gap between product structure and commercial proportion is obvious, and there is a great opportunity for structural improvement; At the same time, under the high asset liability ratio, the annual financial expenses are about 150-200 million, and there is a huge potential for tapping the profits of the main business (refer to the actual operating net cash flow in 2019 / 2020 of + 630 million and + 440 million respectively). There is a broad space for improving the quality of statements in the future.
Investment suggestions and profit forecast: we are strongly optimistic about the double track development of the company's refrigeration + heat management system. It is estimated that the company's revenue in the 21st-23rd year will be 93.83/108.72/12.518 billion yuan, a year-on-year increase of + 27.1 / + 15.9 / + 15.1%; The net profit attributable to the parent company was 420 / 548 / 688 million yuan, a year-on-year increase of + 142.0 / 30.6 / 25.5%, corresponding to 28.53/21.85/17.41 times of PE. Maintain the "buy" rating.
Risk factors: the business development of new energy thermal management system is less than expected, the consumption of downstream civil air conditioning is less than expected, the promotion of the company's commercial business is less than expected, the bid winning of nuclear power project is less than expected, etc.
