Changan Automobile (000625) in-depth report: ready for recovery

Changan Automobile (000625) in-depth report: ready for recovery
Key points of investment: One of the four major domestic automobile groups with a long history 1) Changan Automobile is a camp company of the four major automobile groups of China, with a history of 157 years, 35 years of accumulated automobile manufacturing, 16 production bases worldwide, 35 complete vehicles and enginesFactories and 10 key overseas markets.2) The company is affiliated to Changan Group, and the actual controller is the State-owned Assets Supervision and Administration Commission of the State Council.At present, the Bingzhuang Group holds a company stock ratio of 21.56%, Changan Group holds the company’s stock ratio of 19.32%, Bingzhuang Group is the company’s largest shareholder. The company has a variety of independent and joint venture brands and rich products. 1) The company has formed multi-grade, wide-range and multi-product product lineups for cars, SUVs, MPVs, crossover passenger cars, passenger cars, trucks, etc., covering traditional fuel and new energy modelsHas displacement from 1.0L to 2.0L engine platform.The company owns Changan Passenger Car, Auchan Automobile, Kaicheng Automobile and other independent brands, as well as Changan Ford, Changan Mazda, Changan Suzuki (Suzuki has exited and has become a wholly-owned subsidiary), Changan PSA and other well-known joint venture brands.2) In terms of sales volume, the major sales volume of Chongqing Changan, Nanjing Changan and Hefei Changan and autonomous passenger cars; the major sales volume of joint venture passenger cars of Changan Ford and Changan Mazda.3) In terms of finance, the company’s revenue for the first three quarters of 2018 was 498.52 ppm, a decrease of 3 per year.07%, net profit 11.7.1 billion, down 79 every year.98%, corresponding to a net interest rate of 2.35%.The investment income mainly based on Changan Ford and Changan Mazda is the main source of the company’s net profit. The profitable replacement of Changan Ford has weighed on the company’s overall performance. Ford and autonomous expectations are improving, waiting for dawn 1) In terms of profit contribution, the recovery of Changan Ford’s future operating performance basically determines the overall flexibility of Changan’s performance.In order to realize the recovery of sales volume and business performance, Ford Motor has gradually upgraded Ford China to an independent business unit, adjusted and unified the internal Ford sales channels, promoted the localization of the Lincoln brand, released Ford China’s “2025” strategy and gradually entered the revitalization of the Chinese market.This series of breakthroughs and new car planning efforts should be significantly stronger than the last “1515” strategy, and future sales are expected to achieve a breakthrough recovery.2) This year, new models of Changan autonomous passenger cars have been 南宁桑拿 launched, including the new CS85 Coupe / CS15 / 95 remodeling / CS75 replacement models. Changan autonomous passenger car sales are expected to improve this year. The strategy of electrification and intelligence is positive and aggressive, accumulating power for medium and long-term growth. 1) The company has established and released a relatively detailed new energy vehicle development plan, the “Shangri-La Plan”, and announced that it will completely stop selling traditional fuels from 2025.Cars are fully electrified; through the continuous advancement and implementation of the “Shangri-La Plan”, the company’s new energy vehicle business has achieved sustained and rapid growth and has become an outstanding practitioner in the field of automotive electrification.2) In August 2018, the company released the “Beidou Tianshu” intelligent strategy. At present, it has completed the integrated adaptive cruise IACC and the automatic parking system APA4.Mass production development of key technologies such as 0-level PA-level autonomous driving, and mass production of L2-level autonomous driving technology.As the application technology continues to mature, the company is expected to become a deep cultivator and leader in the field of smart cars in the future. Earnings forecast, for the first time, we have given an “overweight” rating. We expect the company to achieve operating income of 720 in 2018-20.13/756.15/816.65 ppm, ten-year growth rate of -10% / + 5% / + 8%, to achieve net profit attributable to mother 5.70/8.03/28.880,000 yuan, ten-year growth rate of -92% / + 41% / 260%, the corresponding EPS is 0.12/0.17/0.60 yuan / share.We believe that the restructuring of Changan Ford’s sales volume has recovered, and it has stabilized independently. The company’s performance flexibility will be evident. It is estimated that it will develop sustainably and is optimistic about the company’s mid- and long-term development. Risk warning: Changan Ford, Changan Mazda and Changan passenger car sales are lower than expected; cost control is lower than expected; raw material prices are higher than expected