China Shipbuilding (600150): The birthplace of Chinese military shipbuilding plans to list three leading shipyards in total

China Shipbuilding (600150): The birthplace of Chinese military shipbuilding plans to list three leading shipyards in total

Event: On the evening of April 4, a new version of the major asset reorganization plan was announced. The planned acquisition of the century-old shipyard Jiangnan Shipbuilding Company intends to use the 100% allocation of Hudong Heavy Machinery held by it as a disposal asset, and conduct assets with the equivalent portion of the Group’s Jiangnan Shipbuilding EquityReplacement, issue share purchases at the same time: (1) Waigaoqiao Shipbuilding 36.

27% equity and CSSC Chengxi 21.

46% equity; (2) 100% equity in Huangpu Wenchong and 100% equity in Guangzhou Shipbuilding International; (3) Jiangnan Shipbuilding Group’s total equity held by CSSC after the asset replacement is completed.

Jiangnan Shipbuilding is a subsidiary of China Shipbuilding Industry Corporation. Its predecessor was the “General Jiangnan Machinery Manufacturing Bureau” established by the Qing Dynasty in 1865, and is the birthplace of the Chinese nation’s industry.

According to the official website of Jiangnan Shipbuilding, Jiangnan Shipbuilding’s predecessor was the Jiangnan General Machinery Manufacturing Bureau established in the Qing Dynasty in 1865. It was the birthplace of national industry and a pioneer in opening the country to the outside world. It is also a national super-large backbone enterprise and a national key military enterprise.
Jiangnan Shipbuilding has created countless firsts in China: the first batch of seaplanes, the first fully welded ship, the first submarine, the first frigate, the first self-built domestic wheel, the first generation of space measurement ships, etc.The various advanced naval vessels and aerospace survey ships it built have made outstanding contributions to the Navy’s move towards the deep blue and the vigorous development of aerospace surveys.

造船龙头江南厂携手与黄埔\广船两大军船厂携手注入,或带来价值重估作为我国历史上最悠久的军工造船企业之一,江南造船与时俱进,军民产品不断迭代,主要军品包括Destroyer ships, frigates and submarines, all kinds of surface and underwater combat ships, the main civilian products include LPG ships, container ships, bulk carriers and chemical ships, and other civilian ships. The injection of Jiangnan shipbuilding has therefore become the latest reorganization plan.Highlights.
In addition, the two major shipyards of Huangpu Wenchong and Guangzhou Shipyard International, which are supplemented in the plan, make major forces for ships in South China. 南京夜网 The main products include various types of combat ships such as missile frigates / ships, and auxiliary ships, including one hundred years.enterprise.

Civil Ship: Global economy or downward, demand changes or pressure under the background of large demand changes, but the supply side is improving, see the merger of the two ships, IMO (International Maritime Organization) new environmental protection regulations to bring about complementary changes April 3, IMF PresidentSaid that most countries will not be able to replace the effects of economic downturn through interest rate cuts, and the global economy is becoming increasingly unstable.

We believe that the shipbuilding industry also follows this trend: from the perspective of downstream demand, the BDI index on April 5 was 711 points and on January 2 it was 1282 points. 青岛夜网 We believe it is due to the impact of the Chinese New Year and the Brazilian mine disaster. The shipping market demand and freight ratesOr it will weaken in 2019, and shipyards may be eliminated on the supply side. In terms of upstream costs, until the initial stage of April 4th, iron ore futures prices will still rise by 39%, or the price of steel will increase.Facing cost pressures; from the perspective of environmental protection supervision, IMO will launch a sulfur limit order in 2020, and China Boat Factory may be out due to the stagnation of technological updates.

The merger of the two ships is expected, and the company, as one of China’s leading shipbuilding companies, hopes to benefit from the conversion of civilian ships.

Investment suggestion: We believe that the three major shipyards that the company intends to inject have invested a few percent of their core assets in restructuring, and at the same time have the characteristics of heavy assets, and should respond to the PB comparable valuations of other strategic manufacturing machine companies in China.

We calculate the comparable PB to be 2.

65x.

It is assumed that the majority equity of Jiangnan Shipbuilding is calculated at 100% (to avoid excessive assumption interference, and can be adjusted according to new announcements in the future), and its net asset appreciation rate is calculated based on the predicted value of the given assets.

68%, after excluding Hudong Heavy Machinery’s equity placement, the company’s net assets after the reorganization reached 429.

4 trillion, corresponding to a market value of 1137 trillion, and the corresponding market value of the equity after the acquisition and issuance of assets has +48.

61% space (see text for calculations).

Earnings forecast: The shipbuilding industry is picking up its target, lowering its revenue growth rate from 8% / 10% to 2% and 5% in 19-20 years. It is expected that revenue growth rate will be 10% in 21 years, and revenue 172/181 / in 19-21 years. 19.9 billion, net profit 6.

3/7.

6/8.

10,000 yuan, EPS0.

46/0.

55/0.

59 yuan / share, PE 44.

5/36.

89/34.

36 times.

Risk reminder: there are potential uncertainties in the reorganization plan, risks in the progress of reorganization, and the risk of a downturn in the shipbuilding industry.