\u3000\u3 China Vanke Co.Ltd(000002) 011 Zhejiang Dun'An Artificial Environment Co.Ltd(002011) )
Introduction: Dunan and Sanhua both started with cold matching and are the leaders of valve parts. However, in terms of market value, Dunan has lagged behind for a long time, only one sixth of Sanhua. In recent years, the company has reunited its main business and turned losses into profits. Starting from the core causes of market value gap, this paper expounds the current marginal change of the company and the expected difference in the future.
I. comparison of market value of valve faucets: Dunan and Sanhua
From the perspective of income, profit and market value, we believe that the core of the market value gap between Dunan and Sanhua lies in the different layout of growth and collaborative businesses in the past. The core issues are: ① the income side is 65% of the three flowers, and the gap in the growth rate of cold allocation income between them; ② The profit side is 1 / 4 of Sanhua, and Dunan's profit volatility in the past was relatively large; ③ The market value is 1 / 6 of Sanhua. Dunan also has a certain discount compared with Sanhua's valuation.
II. Exploration on the causes of market value gap: four historical reasons promote discount
Causes 1. Layout of overseas and high margin products. On the income side, the two are similar in size in China, and the gap is mainly overseas. Sanhua once achieved faster expansion by acquiring overseas business; The profit end product structure is the main reason for the poor profit of the two valves.
2. The growth business is still in development. The certification cycle of auto zero is longer, but the value of goods is higher. Dunan cut in in 17 years, and the time point is later than Sanhua. Through the growth of Sanhua, it can be seen that the growth and profitability of auto zero business are stronger than the original cold distribution main business.
Causes 3. Non operating profit and loss. Gains and losses at the operating level of non core businesses such as asset disposal, guarantee loss and financial burden are the amplifiers of the volatility of Dunan's past performance.
Causes 4. Valuation repression at the strategic level. At the strategic level, the core restriction of Dunan's valuation discount lies in the company's lack of focus in the past and the room for refinement and improvement of management.
III. current marginal changes: positive improvement and growth
Improvement 1. When the cold distribution structure is upgraded. The company is brewing a series of changes. At present, the assessment and capacity guidance of high-end products such as overseas / commercial products are strengthened, and the effect of strategy implementation is beginning to show. The output and domestic sales share of electronic expansion valves have increased in 21 years.
Improvement 2. Thermal management enlarges performance elasticity. Auto zero is experiencing a high growth, and its major customers Byd Company Limited(002594) have entered the stage of increasing the supply share of vehicle coverage. The subsequent development of new customers has benefited from the active introduction of multi supply by the main engine plant. At present, the company has a batch size of about 900 million and strives for a size of about 4 billion. In addition to obtaining orders, the profit of auto zero will enlarge the performance flexibility with thermal management.
Improvement 3. The profit of equipment business is upward. The special air conditioning business is expected to return to steady growth, and the profit is in an upward channel. The net interest rate of Dunan Electromechanical, a subsidiary of 21h1, has increased by 2.3pct compared with 17 years, and there is still room for upward growth in the future.
Improvement 4. Refocus on management efficiency and financial relief. The company reunited with its main business after 18 years, and its non core assets were basically stripped off in 21 years; Management change and efficiency improvement have become the focus in recent years; If Gree takes a stake, it is expected to support new business expansion while bailing out.
IV. expected difference in the future:
After the positive improvement, Dunan's market value discount relative to Sanhua will have the opportunity to narrow. In addition to the improvement of the profit of the main cold distribution industry and the improvement of the elasticity of the growth business, there may be additional room for expectation difference: ① it is the synergy effect of Gree on the main industry after it takes the lead; ② It is the further promotion of the supporting value of the auto zero business promoted by the launch of new products.
We estimate that the company's annual revenue of 22-23 years is 10.6 billion and 11.7 billion, with a year-on-year growth rate of 8% and 10%, and the parent company's 530 million and 630 million, with a year-on-year growth rate of 30% and 20%. At present, the valuation level of PE11 and 10x is lower than that of peers, covering the "buy" rating for the first time.
Risk warning: order risk, equity change, cost fluctuation, distortion of third-party data, lag of public information
