In next 2 years by 2020 eontec
400mil yuan > US 30 million annual net profits expected
Market value expected 20 billion to 50 billion yuan> 1.4billion US 4billion US
After the implementation of this project will greatly enhance the company's strength in the automotive lightweight materials field. Whether it is raw materials, production capacity, production costs, or strategic area development, customer resources, product promotion, the company has already begun the layout.
Yi'an Technology's magnesium aluminum alloy patent list:
Patent I: Magnesium Alloy Automobile Doors Application No.: CN201330210487
Patent II: Motorcycle Wheel (Magnesium Alloy) Application No.: CN201130075158
III. Future earnings forecast and valuation of Yi'an Technology
Figure 39: Yi'an Technology's recent three-year income statement
16 years ago 3 quarter profit statement analysis
Since 14 years is the year for the company's troika development plan, many of the projects are concentrated on preparations for 14 years. The corresponding supporting capacity, cooperation, customer promotion and R&D have all started in 14 years. Therefore, we have selected similar levels for 15 years as a 16-year comparison.
(1) The company's total operating revenue for each quarter of 16 was slightly lower than 15 years. In the second half of the year, the revenue is better than the first half of the year;
(2) The decrease in operating revenue of the company's products mainly comes from the reduction of foreign income, and the domestic revenue remains stable. The year-on-year increase in magnesium product revenue was due to the year-on-year decrease in overseas sales of aluminum products and liquid metal;
(3) The revenue of the Company's bakelite products, moulds, zinc products and hardware products remained stable.
In summary, the company's 16-year operating income is expected to decline slightly year-on-year.
From the cost side,
Figure 40: Screenshots of the year-on-year changes in major financial data of the company's 16-year semi-annual report
As the company further implements the strategy of developing content based on liquid metal, magnesium aluminum alloy automotive products and biodegradable medical magnesium alloy, it will increase the market share of liquid metal and magnesium aluminum alloy automotive products and accelerate the promotion of biodegradable medical magnesium alloys. While continuing to focus on the consumer electronics business, the clinical research, application and promotion process continues to increase the research and development of the core technologies of liquid metal and magnesium aluminum alloy automotive products, and further expand related markets, which may lead to R&D expenditure, market development, Labor costs and other expenses remain rigidly increasing. Therefore, we can see that the company's R&D investment and management expenses have all increased substantially. At the same time, the company's option incentive costs began to be amortized (included in recurring gains and losses) in 16 years, which added to the already weak profits.
Figure 41: Screenshot of Corporate Equity Incentive Bulletin
Figure 42: Screenshot of Corporate Equity Incentive (Draft) Bulletin
Therefore, it is expected that the company's full-year profit will decline sharply from the same period last year. It is expected to drop by more than 60%.
Future earnings forecast and valuation of the company
Assumptions:
Based on the principle of prudence, our profit forecast is based on the following assumptions:
1. Liquid metal contributes 60 million yuan in revenue in 17 years;
2. Medical magnesium materials will be clinically approved in the second half of 17th and will begin to contribute income;
3. Magnesium and aluminum alloy auto parts business contributed a 30% increase in revenue for 17 years;
4, and other business (bakelite mold zinc products) remained stable in the 17th and later years;
5. The business of aluminum products declined, while the magnesium products business grew steadily.
Estimated company's income statement for 17 years (Unit: ten thousand yuan)
Product item
2017E
Liquid Metal (3C+ New Energy Vehicle Parts)
5000(3C)+2000(New Energy Vehicle Parts)+500(Others)
Magnesium products (including medical magnesium alloys, magnesium alloy automotive parts)
15000+3000 (medical magnesium alloy)+10000 (auto parts)
Aluminum products (including aluminum automotive parts)
24000+2000 (Auto parts)
Others (Bakelite Die Zinc Products Hardware Products)
12000
total
73500
It is estimated that the company's operating revenue in 2017 will be approximately RMB 735 million, an increase of approximately 50% year-on-year. According to the company’s average gross profit margin of 30% in previous years, considering the company’s revenue increase in so many new materials products, the company’s gross profit margin should be able to improve to around 35%, and the company’s cost expenditures during product development and promotion will also increase. The estimated net interest rate is approximately 12%, corresponding to a 17-year net profit of 73,500*12%=88.2 million yuan. In the current 41 million shares, the EPS is 8820/41000=0.215. The current share price is 13.17 yuan, which is 61 times that of PE (it is also a relatively attractive valuation level on ChiNext).
Forecast the company's stock price movement in the next year
Due to the company’s current deterioration in earnings may continue to the second quarter of 17 years, coupled with the post-executive employees (except directors, executives) hold low-cost positions (4.33 yuan), as well as the relatively weak start-up from the medium term The board will have a negative impact on the company's stock price, and there may be a certain period of downside.
Figure 43: Yi'an Technology's first exercise period voting rights
About Yi'an Technology's Future
Liquid metal, medical magnesium alloys, magnesium aluminum alloy auto parts will continue to erupt. The future market space of these three major areas is large. The advance layout of Yi'an Technology in these three major areas and the development and registration of powerful patented technologies are destined for Yi'an Technology to become the domestic leader in these three major segments. In the next three years, Yi'an Technology will become a "blue chip," and the three major businesses are expected to contribute nearly 2 billion yuan (5+5+10) in revenue each year, and net profit will reach 400 million yuan each year. With the "blue chip" 40 to 50 times the PE's valuation level, the reasonable market value of Yi'an Technology will reach about 20 billion yuan, which is about 4 times the current market value of 5 billion yuan. In the next 10 years, with the application of liquid metal deep into all aspects of our lives, Yi'an Technology will grow into a giant company of liquid metal new materials, and the market value may exceed 50 billion yuan!
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