\u3000\u3 Bohai Water Industry Co.Ltd(000605) 068 Mingxin Automotive Leather Co.Ltd(605068) )
Event: the company announced that the actual controller, some directors, supervisors and senior executives y] based on their confidence in the long-term development of the company, intend to increase their holdings of the company’s shares, with an increase ratio of no less than 0.5% and no more than 1% of the company’s total share capital, and the increase amount is 19.77 million yuan to 39.53 million yuan according to the closing price on March 11, 2022.
Comments:
The core management increased their shares, demonstrating their confidence in the development of the company. The subjects of this increase include Mr. Zhuang Junxin, the controlling shareholder and actual controller, Mr. Liu Xianjun, the director and deputy general manager, Ms. Yu Haijie and Ms. Xu Xingchun, the directors, Ms. yuan Chunyi, Ms. Bu Fengyan and Ms. Li Ping, the supervisors, Ms. Shen Dan and Mr. Zhao Chengjin, the Deputy general manager, Mr. LV Qingqing, the chief financial officer, and Mr. Ma Qingfang, the Secretary of the board of directors. Within 12 months from the date of disclosure of the announcement of the implementation period of the share increase plan, the increase price shall not be higher than 30.00 yuan, and the capital source is personal self owned funds, demonstrating the management’s confidence in the company’s future development and long-term investment value.
The company actively expands its customers, and its revenue is expected to usher in an inflection point. Recently, the company’s share price has been adjusted due to the downturn of the market and the rise in the price of raw cow skin. The company actively expands the business of leather, water-based super fiber and other products, with superior product performance, cost performance, customer service and other advantages, and new customer cooperation continues to be implemented. At present, the company’s water-based super fiber has received the nomination letters of Volkswagen maiteng, Volkswagen tanyue, Audi Q3, Audi A6L, Skoda and other models. The leather business is expected to expand the brand orders of new energy vehicles, and the revenue growth is expected to usher in an inflection point.
Profit forecast and investment suggestion: due to the higher than expected rise in the price of cow hide, we lowered the company’s EPS forecast from 2021 to 2023 to 1.15/1.48/1.94 yuan (the original value was 1.22/1.81/2.34 yuan), and the current stock price corresponds to 16.03 times PE in 22 years. The company’s share price has been adjusted in place. At present, the relative performance growth rate of the share price is at a low level. The increased holdings of the management demonstrate their confidence in future development. The company’s future expansion of new customers is expected to continue to land. The growth rate of short-term income will usher in an inflection point. There is more room for domestic substitution in the future, and the “buy” rating will be maintained.
Risk factors: the expansion of new customers did not meet expectations, the automobile industry continued to lack core, the rise of raw cow skin price, the fluctuation of RMB exchange rate, etc.
