Longji (601012): Internationalization of photovoltaic leader plans to acquire overseas manufacturing assets accelerated

Longji (601012): Internationalization of photovoltaic leader plans to acquire overseas manufacturing assets accelerated
Event: Equity acquisition framework agreement, intention to acquire 100% equity of Ningbo Yize On February 23, the company announced a wholly-owned subsidiary Longji Loye Equity Exchange Equity Framework Agreement, the proposed cash purchase of 100% equity of Ningbo Yize, and the transaction consideration was tentatively set 17.800 million.Ningbo Yize’s major shareholders promised that the target company’s non-net profit deduction would not be less than 2 in 2019-2021.2/2.41/2.5.1 billion.All parties strive to gradually formalize the asset purchase agreement before May 31, 2020 and no later than June 30. Short-term growth and thickening performance, long-term 四川耍耍网 foundation for the company’s expansion and expansion. Ningbo Yize’s core assets are production bases located in Vietnam, with 3GW photovoltaic cell capacity and 7GW photovoltaic module capacity.After Europe ‘s minimum import price limit (MIP) for China ‘s photovoltaics was cancelled, photovoltaic capacity in Vietnam and other places was mainly targeted at the United States ‘exports (there is a counter-reaction to China).  (1) The core of this acquisition is to quickly acquire the existing overseas production capacity and quickly occupy the market to lay the foundation for long-term expansion.Through rapid expansion of production capacity, it quickly seized the overseas photovoltaic incremental market and increased and stabilized its mature market share in the United States.The company’s overseas production capacity is currently located in Kuching, Malaysia, approximately 3.25GW battery capacity and 500MW module capacity.In addition to the newly acquired capacity, some of the remaining capacity has been used for at least overseas expansion.The overseas investment and construction cycle is temporary and generally takes more than two years.The company’s early overseas market layout has a certain foundation, and rapid restructuring and volume can be achieved through acquisitions.  (2) Expected estimates of this acquisition are expected to increase net profit in 20201.200000000.The purchase transaction is worth 7.800 million, according to performance commitment 2.With 41 million calculations, the dynamic PE in 2020 is only 7.4 times.Assuming the acquisition is completed before the end of June 2020, it can increase by 1.2 billion net profit.  (3) The cash acquisition has little impact on the company’s financial position.The company’s balance of monetary funds at the end of September 2019 was 164.78 million, the purchase consideration is only 17.8 trillion, and the payment rhythm is relatively loose. The company’s monocrystalline silicon wafers are basically stable, and the extension and expansion of downstream industry chains have achieved initial results. Monocrystalline wafers are still the highest replacement for the photovoltaic industry chain, and the long-term duopoly can have a clear layout.The company’s monocrystalline silicon wafer capacity expansion, cost reduction several times exceeded market expectations, and the monocrystalline wafer leader is vertically stable.The company’s extension and expansion to the downstream industry chain have achieved initial results. It is planned that the company’s cell capacity will reach 10, 15, 20GW, and module capacity will reach 16, 25, 30GW by the end of 2019-2021.Looking at the current progress, expansion is accelerating.The company actively explores overseas markets. In 2020, module integration is expected to enter the global core first echelon.The company is fully realizing the extension from monocrystalline silicon wafers to battery chips and components, and the integration of the entire industry chain leader is about to take shape. Maintain “Highly Recommended” rating As the acquisition has not yet been completed, earnings estimates are not adjusted for the time being.It is estimated that the company’s net profit attributable to the parent in 2019-2021 will be 50.92/68.45/87.10,000 yuan, the corresponding EPS is 1.35/1.81/2.31 yuan, the current sustainable corresponding dynamic PE for 2019-2021 is 25.1/18.7/4.7 times.Maintain the “Highly Recommended” rating. Risk Warning: Uncertainty in the acquisition; target company’s performance is less than expected