Linglong Tire (601966): It plans to publicly issue 2 billion more funds to accelerate the construction of Jingmen Project
Investment highlights: Company announcement: The company plans to publicly issue additional A shares, the total number of shares does not exceed 100 million shares, and the size of the raised funds does not exceed 2 billion, of which 1.4 billion US dollars will be used for Jingmen’s annual production of 8 million sets of semi-steel and 1.2 million sets of all-steelTire project, $ 600 million to supplement working capital.
The issue of the public additional issue has been approved by the company’s board of directors, and still needs to be approved by the shareholders’ general meeting and the China Securities Regulatory Commission.
This issuance is a public offering to unspecified objects. The two will assign a preferential placement to all shareholders of the company registered on the distribution registration day after the market closes. The placement ratio is authorized by the board of directors and its authorized personnel at the general meeting of shareholders.Institutional consensus is determined.
The issue price of this additional issue is not lower than the average price of the company’s stocks on the 20 trading days before the announcement of the prospectus or the average price of the company’s stocks on the previous trading day.
The funds raised will be invested in the Jingmen factory, which will break through the expansion of production capacity and expand market share.
With the rapid development of the domestic automobile industry, the domestic automobile ownership has steadily increased, and by the end of 2019, the automobile ownership has reached 2.
600 million vehicles, an increase of 8 at the end of 18 years.
The growth of the automobile market has driven the company’s tire production and sales to continue to grow. In the past three years, the company’s production capacity has been maintained at a high level, and the problem of insufficient production capacity has gradually emerged.
In order to strengthen the company’s mass scale, the company built 5 production bases in China and 3 production bases overseas in accordance with the “5 + 3” strategy.
The funds raised from this additional issue will be invested in the fourth domestic production base-Jingmen Base.
According to the feasibility study report released by the Air Force Company, the Jingmen plant will form a total capacity of 12 million sets of semi-steel tires, 2.4 million sets of all-steel tires, and 60,000 sets of engineering tires. The project is divided into three phases and the total investment is about 5.4 billion.yuan.
The 8 million sets of semi-steel and 1.2 million sets of all-steel invested in this raised fund are the first two phases of the plant, with a total investment of about 3.1 billion yuan.
The additional funds raised in this issue will accelerate the construction of the first two phases of the project and lay a good foundation for the third phase of the project.
In addition, the additional issuance and reorganization optimized the company’s capital structure. As of September 30, 2019, the company’s assets and liabilities replaced 57.
75%. The use of funds raised through this issuance to supplement liquidity can improve the ability to repay short-term debt, reduce the level of debt ratios, and improve the ability to resist risks.
The Jingmen plant and the Serbian plant will be the main driving force for the company’s performance growth in the next two years.
In 2019, the company benefited from the release of production in Thailand and the Liuzhou plant, as 南宁桑拿 well as the increase in the gross profit margin of tires caused by the decline in raw material prices. The company’s net profit increased and the company achieved operating income of 125 in the first three quarters of 19.
09 million yuan (+13 compared with the same period last year).
26%), net profit attributable to mother 12.
1.4 billion (+ 37% YoY).
The company’s output growth from 2020-2021 will be mainly contributed by the Jingmen plant and the Serbian plant. In late November 2019, the first full-steel tire at the Jingmen plant was rolled off the production line; in mid-January 2020, the first semi-steel at the Jingmen plantTires are off the assembly line. One million full-steel tires and 3.5 million sets of semi-steel tires in the first phase of the project are in trial production. It is expected to 西安耍耍网 contribute to production from mid-2020; according to the company’s plan, the Jingmen factory will be completed in May 2021 and all civil works will be completed.Engineering and production equipment installation.
Among them, the first two phases of the project are expected to achieve an annual sales income of 21 after reaching production.
63 ppm, net profit1.
The Serbian project also laid the foundation stone laying ceremony in March 2019. The factory plans to form an annual production capacity of 12 million sets of semi-steel tires, 1.6 million sets of all-steel tires, 20,000 sets of engineering tires and agricultural radial tires. The first phase of the project is expected to be completed by the end of 2020.Will be put into production.
The successive commissioning of Jingmen and Serbian factories will become the company’s continuous growth driver.
Supporting market news spreads frequently and continues to strengthen brand building.
In January 2020, Germany’s MAN Commercial Vehicle Co., Ltd. conducted an on-site audit of Thailand’s Linglong. Eventually, Thailand’s Linglong all-steel tire factory passed the audit and successfully entered its supplier system.
Mann’s commercial vehicle products cover medium / heavy / super heavy trucks, special vehicles, city buses, and luxury vehicles. It is a world-class commercial vehicle brand.
Thailand Linglong successfully entered the Mann supporting system, which confirms that Thailand Linglong has developed in the past ten years and has reached international advanced levels in technology research and development, quality management, and timely delivery.
At the same time, this has also accelerated the internationalization of the brand for Linglong Tire, which has broken a solid foundation for high-end.
With the company’s continued deep cultivation and innovation in core technology research and development, emerging market development, brand value building, and diversified after-sales service, the company is gradually entering first-class automobile factories such as Audi, Volkswagen, GM, Ford, Renault Nissan, Red Flag, Geely, Great Wall and otherSupporting supply system.
In 2020, the company’s supporting system will continue to march into high-end models, and further increase the share of existing customers, increase the sales of supporting markets, increase product added value, and strengthen the leading position in the industry.
Profit forecast and investment grade: Maintain the company’s profit forecast for 2019-2021, and expect to realize net profit attributable to mothers.
80, 20.10ppm, corresponding to PE 18X / 16X / 15X, maintaining the “overweight” level.