The profitability has increased dramatically. Analysts are extremely optimistic about this motor giant.
Recently, due to the international situation, oil and gas prices have continued to rise, and the concept of A-shares has also exploded. Analysts have found that the company of Wolong Electric, as an upstream company of oil and gas, has significantly improved its profitability. The logic is as follows.
1. Employee stock ownership encourages core management personnel
In 2017, the company completed the re-division of the company's organizational structure and set the assessment targets. The shareholding plan is rolled out to ensure long-term incentives. Under the strict corporate performance conditions and standards, we can further stimulate the work potential of employees and contribute to the achievement of the company's performance goals.
2. Global M&A and development achievements motor giant
At present, Wolong Holding Co., Ltd. is one of the top 500 enterprises in China, and motor manufacturing has now reached China's leading position. Through the rapid development of global M&A companies and the company's 139 years of experience in motor manufacturing, the acquired companies are traditional large-scale enterprises, which makes the company a global market and technology leader.
The company's investment in research and development is also increasing. In 2016, it exceeded 300 million yuan, reaching 3.54% of revenue. It shows that the company is advancing with the times and is determined to be at the forefront of technology.
3. The recovery of the downstream industry is obvious, and the profitability is greatly improved.
The downstream of the company, such as oil and gas, coal and steel, showed signs of recovery, which drove the growth of the company's revenue scale. In the second half of 2017, as the equipment manufacturing capacity became saturated, the bargaining power of the company's products was improved, which pushed up the gross profit margin of the products. In the first quarter of 2018, despite the exchange loss, net profit increased by 238.39% year-on-year. The company expects to maintain high growth in revenue and continuous improvement in gross profit margin in the short to medium term.
4. New markets continue to develop, breakthroughs in new energy vehicle motors
In 2017, affected by policies and other factors, the company's new energy vehicle motor business remained stable. The company has entered the domestic mainstream manufacturer supply chain and is the main supplier of some large-volume models (such as BAIC EC series). At present, it has obtained fixed-point letters from more than 500,000 new energy vehicle drive motors and parts from foreign manufacturers, and has jointly developed and trial-produced new energy vehicle motors with other world-renowned spare parts manufacturers.
Considering that the related business of Wolong Electric has strong growth, the performance has shown a high growth trend in recent years. CITIC Jiantou believes that the company's reasonable valuation is 20 times, and the stock price has a large room for growth.
