Mind List Control (603508) First Coverage Report: “Update + New Creation” Two-pronged approach to the following control leaders is expected in the future
The company is a leading enterprise in rail transit train control system (LKJ system).
Mind Train Control is a leading supplier of overall solutions for rail transit train operation control systems and driving safety monitoring systems.
As one of the only LKJ system suppliers in the market, the 武汉夜网论坛 company’s 2018 revenue is attributed to its parent net profit and non-net profit has increased by 17 respectively.
Railway investment is stable, and “renewal + new construction + upgrade” promotes the prosperity of the LKJ system market.
(1) Railway investment scale will remain high in 19 years, high-speed rail network, higher EMU density, increased demand for LKJ system, and improved prosperity; (2) “new construction + renewal” of locomotive and EMU will promote the recovery of the listed control market.
We predict that the domestic LKJ train control system market space will be 12 in 2019-2021.
6.4 billion (20% CAGR).
(3) LKJ-15 has passed CRCC certification.
The company’s LKJ system market share has steadily increased. In 2018, the company’s LKJ system market share increased by 48.
6%, an increase of at least 3 percentage points. If the new LKJ-15 system is promoted, the company’s LKJ system market space will further increase and increase profitability.
The increase in the purchase of high-speed EMUs has brought about a growth in aircraft security business.
The purchase volume of EMUs in 2018 is higher than that in 2017. In the next two years, tenders for EMUs will help maintain the 2018 level. Boot belts will promote the demand for security systems. It is predicted that the market space for mechanical security systems will be 3 in 2019-2021.
Merger and acquisition of Lanxin Technology-an important breakthrough in high-speed rail business.
According to Mind Control’s 2018 annual report, Lanxin Technology is the only supplier of on-board equipment for DMS systems and EOAS systems for upstream EMUs.
Realized revenue in 20183.
51 ppm, net profit1.
09 million yuan, an annual increase of 16%, 9 respectively.
5%, business is growing steadily.
The product synergy revenue brought by the acquisition of Lanxin Technology may grow faster than expected in the future, helping the company to implement its high-speed rail business strategy.
Investment suggestion: The company is the domestic leader in train control system. Considering the increase in demand for new car systems brought by “new construction + renewal”, the demand for new car systems and the new market profit brought by the upgrade of train control systems, we predictNet profit for 2019-2021 is 4.
34 trillion, 淡水桑拿网 corresponding to EPS 2.
We give the company 30 times PE level in 2019, corresponding to a target price of 62.
10 yuan, the first coverage given a “buy” rating.
Risk reminder: The bidding volume of the EMU is less than expected, the promotion of the new system LKJ-15 is less than expected, and the business extension is less than expected risks.