Changan Automobile (000625): Selling PSA shares, Changan lightly enters the battle

Changan Automobile (000625): Selling PSA shares, Changan lightly enters the battle
Event: On December 北京桑拿洗浴保健 30, 2019, the company and Qianhai Ruizhi signed the “Equity Transfer Agreement”, which transferred all 50% of its Changan PSA equity to Qianhai Ruizhi for a transfer amount of 16.300 million yuan.After the completion of the equity transfer, Changan Automobile no longer holds the equity of Changan PSA. For DS vehicles, 57 DS4s, 87 DS5s, 292 DS6s, 1614 DS7s, and 1,047 DS4s were sold from January to November 2019.The sluggish sales performance replaced Changan PSA for successive years, which were changed to 16 in 2016-2018.300 million, 11.100 million, 8.70,000 yuan, the breakthrough in the first three quarters of 2019 enlarged to 22.300 million.The transfer of 50% equity of Changan PSA this time, the company does not hold any equity in Changan PSA, completely shake off the burden of restructuring assets, effectively alleviate the drag on the company’s overall profit. Subtract on the brand, add on the quality, clear the internal carding ideas and release. Changan PSA is one of a series of actions for the company’s brand carding. The company also performs subtraction on other brands: 1) JMC Holdings: Date Aichi, share ratio50% to 25%, JMC Holdings invested 8 in 2018.200 million; Changan Suzuki: Suzuki announced its withdrawal from the Chinese market in 18 years: Changan New Energy: Changan Automobile changed its shareholding from 100% to 48.95% of the table, 2 per share in 2018.300 million.After a series of brand subtraction combo boxing, the company’s performance drag will be significantly slowed.In essence, the company will focus its resources on making fine independent brands, Changan Mazda and Changan Ford, and add quality.Driven by CS75 Plus, this round of brands has an obvious upward trend, and it is worth looking forward to turning losses into profit; Changan Mazda has a stable business over the years, with a net profit of 2.5 billion US dollars per year, which is the company ‘s sustainable and stable profit cow;Changan Ford launched a new product cycle, which is expected to reverse the decline and return to the scale of 10 billion profits. Industry recovery + Ford’s strong product cycle is the strongest logic, and Changan Ford has a strong product cycle: 2018 Fox replacement model, Furuis remodeling has been listed; 2019 Sharpe mid-range remodeling, Sharpline, Lincoln Corsair launchedThe 2020Q1 Ford large SUV explorer is localized, and the Lincoln pilot is listed. In 2021, the new Sharp and Lincoln navigators will be listed.We 北京体验网 believe that the highlight of this round of Changan Ford’s strong cycle is to surround Lincoln with an attempt to significantly improve Changan Ford’s profitability.The “resonance” of the company’s product cycle and industry cycle will greatly improve the flexibility of the company’s performance. Earnings forecast and investment recommendations predict that the company’s EPS for 2019-2021 will be -0.13 yuan, 0.86 yuan, 1.76 yuan, corresponding to -78.7 times, 11.7 times, 5.7 times.Maintain the company’s “Buy” rating. Risk warning: The domestic auto industry is weaker than expected; the company’s product sales are lower than expected; Changan Ford’s new car launch is lower than expected; Lincoln domestication is lower than expected.