Jinlitai: Leading Automotive Coatings M&A Fund Helps Spread Its Wings

The company is a leading mid-to-high-end industrial coatings independent brand supplier in China. The company’s business is mainly divided into automotive original manufacturers coatings and other industries. There are two major categories of coatings. Since its establishment, the company has been engaged in the research and development, production and sales of coatings. Coating products are widely used in automobiles, agricultural machinery, construction machinery, motorcycles, auto parts, and light industry. The company can be at the forefront of its domestic counterparts in terms of product series, technological leadership, quality stability, and cost, and is close to the world’s advanced level of parts, building curtain walls and other market areas.
The company focuses on the coating industry high-end automotive coatings and other fields. Through R&D and independent innovation, the company has continuously introduced difficult production and technical barriers. A new type of environmentally friendly and energy-saving coatings with high levels and few competitors. The paints sold by the company are all lead-free paints, of which electrophoretic paints and ceramic paints are all environmentally friendly water-based paints. Some electrophoretic paints also reduce the baking temperature to meet customers’ energy saving and emission reduction. Demand.
　　The company intends to participate in the establishment of an M&A fund, with the help of the industrial advantages already formed in the field of fine chemicals, through the layout and integration of semiconductor materials, new energy materials, etc., to realize the overall improvement of the company’s fine chemical business. , The size of the M&A fund does not exceed 500 million yuan (Phase 1), of which the company’s capital subscription with its own currency funds does not exceed 125 million yuan.
　　The company’s automotive original paint business is directly related to the overall growth of the Chinese automotive market and the growth of the number of supporting production lines. In the first quarter of 2017, the production and sales of commercial vehicles were 1.0257 million and 1.0545 million, an increase of 15.37% and 22.85% year-on-year. The company’s automotive original coatings business sales have increased year-on-year. We expect the company’s 2017-2019 EPS to be 0.17 yuan, 0.19 yuan, and 0.23 yuan, respectively, and give a buy rating.
　　Risk warning event: the risk of raw material price fluctuations causing gross profit margin changes, the risk of intensified market competition, the lower-than-expected production schedule of new products, and the failure of the expansion of M&A funds to meet expectations.