Zhongding (000887): Landing of convertible bonds helps build global competitiveness

Zhongding (000887): Landing of convertible bonds helps build global competitiveness

Event overview: The company issued an announcement: convertible bonds will be redeemed online on March 8th, with a total issuance of 120 million yuan and an initial conversion to 11.

99 yuan.

The five-year annual interest rates are 0.

5%, 0.

7%, 1.

0%, 1.

5%, 2.

0%, 2.


The credit rating of this bond is AA +.

Event comment: convertible bonds landed, accelerated product assembly upgrades, and welcomed a better Zhongding era under the wave of electrification.

The company plans to issue no more than 1.2 billion convertible bonds, which are mainly used for the expansion and upgrading of rubber shock-absorbing products and cooling system ducts.

Among them: 1) Rubber shock absorption project-technology landing, and promote product assembly: The project plans to use 800 million to raise funds to replace aging equipment and increase advanced production equipment.

After reaching production, it will replace the original 150 million pieces / year of original vibration and noise reduction rubber parts, increase 40 million pieces / year, and add 1.77 million pieces of control arm parts / year.

The company’s products will be upgraded from a single piece of essential rubber to an assembly product with a forged aluminum bracket, which will truly achieve lightweight and product assembly upgrades.

For the new production capacity, 32 million pieces of vibration and noise reduction rubber parts have been ordered, which is about 80% of the planned expansion of production capacity; the control arm is expected to obtain 136.

50,000 pieces, about 77% of the expanded production capacity.

2) Cooling system runway project-accelerate the domestic landing of TFH and welcome the tide of new energy.

It is planned to use 400 million raised funds for plant construction and introduction of advanced equipment.

After reaching the production capacity, the annual capacity of the 南宁桑拿 cooling system pipe assembly will increase by 15 million standard meters, and the initial completion of the German TFH landing will gradually open the domestic engine and new energy battery cooling system assembly market.

At present, the company has obtained 16.65 million standard meters of intentional orders, covering the full capacity of this round of expansion.

Rebuilding global competitiveness and opening up multidimensional growth space.

The company is one of the few outstanding companies that can achieve integration of overseas mergers and acquisitions. It has formed a successful business model of mergers and acquisitions, technology integration, product upgrades, and secondary market development.

Zhongding will open up short, medium and long-term multi-dimensional growth space in the future.

1) Short-term-sealed: 杭州夜生活网 KACO, Cooper and other landing companies welcome the volume period. Among them, the company expects that the average growth rate of KACO and Cooper revenue in 2018 will be 10.

2%, 19.

2%; 2) Medium-term—Vibration reduction and noise reduction, cooling system: The forthcoming convertible bonds will accelerate WEGU, TFH technology will be implemented, and product upgrades will be facilitated. The company expects WEGU and TFH average efficiency to be 7 in 18-22.

7% and 8.

6%; 3) Long-term-air suspension: With AMK landing in the future, it will open the blue sea of air suspension for the company.

However, as it is currently in the early stage of development and its performance has grown slowly, the company expects that the average growth rate of operating income for 18-22 years will be 1.


Investment suggestion: The company integrates high-quality companies such as KACO, WEGU, AMK, TFH through mergers and acquisitions. The products move from low-end to high-end, a single transformation and integration, gradually sealing, noise reduction and cooling, cooling, air suspension and the global leading position of motors.

Benefiting from the wave of domestic alternatives and new energy, performance will enter a fast-rising channel.

Regardless of the impact of the conversion, the company’s net profit attributable to the parent is expected to be 11 in 18-19.

6, 12.

80,000 yuan, the corresponding EPS is 0.

95, 1.
05 yuan / share.
As the average expectation of the highest budget has risen to about 17 times, 17 times PE in 19 years is given, the target price is raised to 18 yuan, and the rating of “Buy” is maintained.

Risk warning: convertible bond issuance, new business landing and development is less than expected, raw material growth, etc.