Tellhow Sci-Tech Co.Ltd(600590) plans to spin off the intelligent power distribution business and accelerate the adjustment of industrial structure

Tellhow Sci-Tech Co.Ltd(600590) ( Tellhow Sci-Tech Co.Ltd(600590) ) event: the company announced on March 1 that it planned to transfer 100% equity of Jiangxi Taihao Intelligent Power Technology Co., Ltd., a wholly-owned subsidiary, to Shenzhen Yongtai Digital Energy Technology Co., Ltd., so as to realize the stripping of intelligent power distribution business and further focus on the development of military equipment industry.

It is planned to spin off the intelligent distribution business and accelerate the adjustment of industrial structure. In recent years, the company has continuously promoted the adjustment of industrial structure and focused on the development of military equipment industry. In 2021, the company completed the transfer of 85.315% equity of Taihao software, and now transfers 100% equity of Jiangxi Taihao power again to realize the stripping of intelligent distribution business. It is expected that the completion of this transaction will bring about 95 million yuan of income to the company, and Jiangxi Taihao power will no longer be included in the scope of the company’s consolidated statements. We believe that this transaction is conducive to promoting the adjustment of the company’s industrial structure, recovering funds, further concentrating resources, developing the military equipment industry and strengthening the main business, so as to improve the company’s core competitiveness.

Focus on the military equipment industry and move towards large-scale military industry groups. The company’s military equipment industry carries out business in the direction of weapon equipment informatization. Its main products include vehicle communication command system, shipborne combat auxiliary system, military navigation equipment and various military power equipment. Since its establishment, the company has successively acquired Jiangxi sanbo Motor General Factory, Hengyang Siji General Factory, Tianjin 764 communication and Navigation Technology Co., Ltd. and other old state-owned military enterprises, acquired Shanghai Hongsheng System Engineering Co., Ltd., a private military enterprise, and participated in Jiangxi Guoke Military Industry Group Co., Ltd., Shenzhen AVIC bit Communication Technology Co., Ltd Shanghai Rongke special equipment Co., Ltd. and other military enterprises have rich experience and ability in mixed reform, reorganization, management integration and resource integration of military enterprises. We believe that the company’s continuous extension of the military industry chain through extension M & A is in line with the strategic development direction of “focusing on military information equipment and supplemented by military energy equipment”. It can form good synergy in the fields of communication command and satellite navigation, which will help promote the company to continue to move forward to a large-scale military industry group.

Profit forecast and investment rating: it is estimated that the company’s net profit from 2021 to 2023 will be 106 million yuan, 252 million yuan and 323 million yuan, EPS will be 0.12 yuan, 0.30 yuan and 0.38 yuan, corresponding to 57 times, 24 times and 19 times of PE, maintaining the “buy” rating

Risk tip: the growth of military orders is less than expected; The expansion of extension M & A was less than expected.

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