Xinquan Shares (603179) Incident Review: Release of Employee Stock Ownership Plan Pointing at Interior Leader

Xinquan Shares (603179) Incident Review: Release of Employee Stock Ownership Plan Pointing at Interior Leader

The company announced the first phase of the employee shareholding plan (draft): the total share of the participant’s subscription of the employee shareholding plan was 60 million, with a total amount of 60 million yuan.

The total number of employees participating in the subscription does not exceed 300, of which 10 are directors, supervisors and senior management of the company intending to participate in the subscription of the employee stock ownership plan. The planned subscription share is 22.98 million, accounting forThe ratio is 38.


  In 2018, the company announced the equity incentive plan or employee shareholding plan. The total amount of funds proposed for repurchase is not less than 40 million yuan, not more than 100 million yuan, and the price of repurchased shares does not exceed 20.

08 yuan / share, it is estimated that the number of shares repurchased is about 4.98 million shares, accounting for about 2 of the current total share capital.


As of January 25, 2019, the company gradually repurchased 349 shares.

40,000 shares, the total amount paid is 5,999.

12 yuan (excluding commissions, transaction fees and other transaction costs).

In this first phase of the employee plan, the company intends to transfer the shares 349 repurchased by the company for a total amount of 6,000 million through non-transaction transfer.

40,000 shares, accounting for 1 of the company’s current total share capital.

53%, corresponding to the cost of employee shareholding price of 17.

17 yuan.

We believe that the company’s core power subscription ratio is high, and employees basically subscribe at the repurchase cost price, which is conducive to binding more employees’ interests and motivating employees, thereby improving operating and management efficiency.

The resonance from Geely to “Geely” looks up to 2020: Resonance with Geely cycle.

The company’s cooperation with Geely has continued to deepen, fully supporting Geely’s star models, and the proportion of revenue from Geely has been 17 in 2012.

2% rose to 29 in 2018.

4%, Geely is currently the company’s largest customer.

Geely has achieved a recovery ahead of the industry and has included a new round of product cycles. It is expected that Geely’s sales will reach 1.65 million in 2020, restoring elastic strength.

We believe that the company is likely to continue to supply new cars, and to perform repairs with Geely and have breakthrough earnings flexibility.

  Looking into the future: With the continuous growth of Geely, the “Geely integration” trend ushers in opportunities for supply chain integration.

Geely adheres to the strategy of brand segmentation in the medium and long term, and differentiates its product mix to meet the consumption needs of various classes, while gradually penetrating the mid-to-high-end market, and gradually strengthens its independent leader.

Geely is discussing the possibility of business merger with Volvo. We believe that “Geely integration” is unstoppable. Geely’s mature supply chain system and cost control advantages in the Chinese market will promote the localization of Volvo’s parts and components in China, and a more compact cost structure.Companies will benefit significantly under the logic of alternatives.

Driven by the increase in supporting volume and ASP average, we expect that in the medium term, “Geely” (Geely + Collar + Volvo) is expected to contribute more than $ 5 billion in revenue to the company.

From autonomous to joint venture, both volume and price rise, supporting Volkswagen to start a new joint venture journey: We expect to support Volkswagen Jetta door panel pillars from September 2019, converting Jetta’s production capacity and climbing, and will gradually contribute to the performance; thus, Audi Q3 and A7 pillars will be supported and enter luxuryBrand supply system.

The mass system continues to penetrate, and we expect the company to get more orders for the mass system.

In the medium and long term, import substitution is accelerating, and the company’s future development will expand more joint venture customers to achieve both volume and price gains.

The size of domestic interior parts has reached 100 billion US dollars. We estimate that the penetration rate of independent brands will continue to increase. The company integrates cost-effective and fast corresponding capabilities to seize the share. It is estimated that the revenue scale in 2025 will exceed 15 billion US dollars.

  Product volume and price rose + market share steadily increased: 1) Major products volume and price rose: passenger car instrument panel assembly / door inner guard assembly / pillar guard assembly 2014-2018 unit price CAGR were +16.

6% / + 16.

1% / + 25.

8%, sales CAGR were 27.

0% / 57.

5% / 80.

7%; 2) Market share steadily increased: 2016-2018 passenger car dashboard assembly market share was 2 respectively.

7% / 3.

7% / 5.

6%.As the 北京养生会所 company’s supporting facilities range from independent to joint ventures, we believe that the trend of rising volume and price of major products and increasing market share will continue.

  Investment suggestion The rising star of “Geely” supply chain + import substitution to benefit from autonomous interiors: As the core component of the Geely industry chain, the company will significantly benefit from “Geely integration” and continue to grow with Geely.

At the same time, supporting public started a new journey of joint venture, from independent to joint venture, driving the company to achieve both volume and price.

Maintain profit forecast: It is expected that the revenue growth rate for 2019-2021 will be -8.

1% / + 17.

8% / + 22.

1%, up to 31.

3 ppm / 36.

800 million / 45.

0 million yuan, the growth rate of net 杭州桑拿 profit attributable to mother is -30.

1% / + 39.

6% / + 30.

3%, up to 2.

0 ppm / 2.

8 ppm / 3.

600 million, EPS is 0.

87 yuan / 1.

21 yuan / 1.

58 yuan, corresponding to the current PE 28 times / 20 times / 15 times.

With reference to the industry’s average forecast level, and considering the company’s expanding customers and extra orders, the company is given a PE estimate of 25 times in 2020 with a target price of 30.

3 yuan unchanged, maintain “Buy” rating.

  Risk warnings: The passenger car industry has sold less than expected, customer expansion has fallen short of expectations, industry competition has intensified, and raw material costs have increased.

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