Investor Network TMT Industry Group Wang Zhuli
Nowadays, the market's attention to the new energy vehicle market is mostly focused on the field of lithium batteries, including the route of lithium iron phosphate and ternary batteries. Another part of the eyes are on the emerging hydrogen energy technology, Hunan Corun New Energy Co., Ltd. (hereinafter referred to as "Corun", 600478.SH) but hope to expand in this field, in November this year, the company acquired patents in the field of hybrids and thus triggered inquiries from the Shanghai Stock Exchange. The market is concerned about both the financial issues of acquisitions and the future of hybrid vehicles.
"Sell first, buy later" was questioned by regulators
On December 1, Corun replied to the Shanghai Stock Exchange's inquiry and explained the patent acquisition in November this year.
The reason for the regulatory inquiry is that CHS (a holding subsidiary of Corun) has transferred the patent to Wuxi Mingheng and now bought the patent from Wuxi Mingheng, and the SSE requires the company to explain the reasonableness of its behavior, whether there is a profit adjustment situation, and whether the transaction has commercial substance.
According to the data, in 2017, CHS transferred 57 patents to Wuxi Mingheng for a price of 315 million yuan, and in December 2020, CHS continued to sell 9 patents to Wuxi Mingheng for a total amount of 70 million yuan. Nowadays, Wuxi Mingheng Company has transferred some of the patented technology to CHS Company in reverse, and the transaction price is 50 million yuan.
CHS is a joint venture between Corun and Geely Automobile. Wuxi Mingheng is a company jointly established by CHS and Yunnei Group, although it has a certain relationship with Corun, it is not a consolidated subsidiary of Corun.
There is a reason why the SSE questioned whether Corun "adjusted profits". Looking at the company's profitability in recent years, Corun has sold patents when it was losing money, and bought patents again when it turned a loss into a profit in the third quarter of this year, which inevitably made regulators suspicious.
Specifically, in the four years from 2017 to 2020, Corun's deduction of non-net profit has been in a state of loss, with losses of about 100 million yuan, 140 million yuan, 360 million yuan and 160 million yuan respectively, and this year's mid-report company deducted non-net profits to return to positive, as of the third quarter, the total profit was 23.39 million yuan, up about 123% year-on-year.
Corun deducts non-net profit
(Source: Flush)
The company's earnings are also reflected in the share price. In the loss years, the company's stock price has been hovering around 3-4 yuan / share. Perhaps affected by the positive report, the company's stock price began to climb sharply since June, reaching a high of more than 8 yuan / share at the end of August, and then slightly adjusted, as of December 13, the report closed at 6.68 yuan / share.
Corun said that the transaction is based on technical considerations. Previously, CHS transferred the relevant technology patents of HT3800, mainly staying in the structural principle and design scheme stage. Wuxi Mingheng continued to develop on this basis, completed the calibration matching, strategy control and other work, and finally formed the DH68 product, which is the target purchased by CHS Company.
It should be noted that in the transaction in 2020, CHS Company has not completely recovered the balance of the balance of Wuxi Mingheng so far, the transaction of 70 million yuan has only recovered half of the money, Wuxi Mingheng is still in arrears of 35 million yuan, and the related research and development products have not been delivered to CHS Company.
In this regard, the Shanghai Stock Exchange inquired, "Whether There is any harm to the interests of the company." Corun said that it is expected to recover the balance before the end of 2021, "there will be no corresponding liability for breach of contract, and there is no harm to the interests of the company." ”
What is the prospect of hybrid cars
Corun obtained DH68 related technology this time, which means that the company has a new expansion into the field of oil-electric hybrid vehicles. In fact, in addition to the vehicle hybrid business, battery materials and consumer batteries are also important sectors of the company. Hybrid battery series products (including nickel foam, cathode sheet, negative electrode sheet, etc. for hybrid vehicles) constitute the company's technology moat.
However, the battery business has not been able to turn the company around for the time being. Corun said it hopes to further develop new energy vehicle products "to reverse the decline in business." ”
Corun product distribution
However, how the prospects for hybrid cars will be further observed remain. Some BAIC Group experts introduced to the "Investor Network" that unlike pure electric vehicles, hybrid vehicles are still based on the engine of fuel vehicles, and electric motors are added to this. Traditional fuel vehicles are trapped in the "thermal efficiency" problem, often waste a large part of the energy, the addition of the motor, it can make the engine work in the best position, improve fuel efficiency, so as to achieve the purpose of energy saving and emission reduction.
From the perspective of industrial development, pure electric vehicles adopt a new internal structure, which is quite different from the traditional engine, which is an opportunity for China's automotive technology to "lightly load" and achieve curve overtaking. But hybrid cars still have to solve problems such as engine technology. In terms of oil-electric hybrid technology, Japan's Toyota and Honda have developed earlier and are at the forefront of the international market.
This situation was reflected in the transaction between CHS and Wuxi Mingheng. After Wuxi Mingheng obtained the patented technology of CHS Company, its revenue and net profit are still difficult to boost. In 2020, Wuxi Mingheng's revenue was about 21.84 million yuan, and the net profit was only about 1.17 million yuan, and the revenue in the first three quarters of this year was about 4.99 million yuan, and the net profit was only about 2.54 million yuan.
From The reply of Corun to the announcement, it can be seen that Wuxi Mingheng is stuck on technical issues. Generally speaking, a new transmission takes about 5 years of development cycle, although Wuxi Mingheng try to shorten the time, but the main equipment, software need to be imported from overseas, the new crown epidemic hinders business exchanges, but also drags down the research and development process of Wuxi Mingheng. In addition, the tight supply of chips is also an important factor hindering production.
From the customer point of view, although some technologies of Wuxi Mingheng have been applied to some models of major customers such as Futian and Jacques, mass production has not yet been achieved. The Shanghai Stock Exchange asked Corun to "clarify whether there is an order in hand", and Corun replied that "orders will be obtained according to the customer's hybrid model listing plan" and that "there is still uncertainty about future business development and order acquisition".
From the perspective of the entire group of customers, Corun has long supplied nickel foam, battery plates, power batteries and other components for Toyota Motor, which is an important producer in the field of hybrid vehicles. In 2020, 3 million hybrid vehicles will be sold worldwide, of which Toyota will sell 1.8 million vehicles, accounting for 60% of global hybrid vehicle sales. It remains to be seen how the hybrid system developed by CHS will compete differently from established companies such as Toyota, and whether the business within the group will "fight".
What is the outlook for the commercial vehicle market
Although there is still uncertainty in the production of hybrid vehicles by Corun's CHS company, the company's targeting of the commercial vehicle market may become a growth point. The DH68 related patents purchased by CHS are also mainly used in light commercial vehicles and SUVs. Corun said that at present, There are no batch listed products in China in terms of hybrid gearboxes for light commercial vehicles. If CHS can seize the opportunity and fill the gap, there is still some room for development.
As for the question of when its own products can be listed in batches, Corun said in the reply letter that it will achieve fixed-point launch in the fourth quarter of 2021, and it is expected to achieve small-batch production and sales in 2022, mass production and sales in 2023, and the production scale of the first phase is 150,000 units per year.
In the future, whether pure electric vehicles will replace hybrid vehicles is inconclusive, and both are currently growing, but pure electric vehicles are growing faster. According to the statistics of the China Automobile Association, the growth rate of pure electric vehicles in 2020 is 19.82%, the growth rate of hybrid vehicles is 16.64%, as of October 2021, the annualized growth rate of pure electric vehicles is 137.56%, and the annualized growth rate of hybrid vehicles is 114.36%.
From the perspective of The Corun battery business sector, in November this year, the secretary of the board of directors of the company replied to investors on the Flushing platform, saying, "The company's power battery is being deeply laid out in the field of rail transit special power supply and aviation cold chain, and has obtained batch orders from customers such as Wenzhou and Nanjing Railway Bureau." ”
Compared with the 60 companies in the same industry, Corun is far small in scale, with a current market value of about 11.3 billion yuan, while the median value of the industry is 25.7 billion yuan. From the valuation point of view, the median price-earnings ratio of the industry is about 98 times, and The Corun is far from about 67 times. From the perspective of profitability, the gross profit margin of about 14.6% of Corun is also lower than the industry median of 23.7%.
Changjiang Securities Research Report analysis said that although compared with Japanese brands, China's hybrid technology started late, but the rise of independent technology is conducive to reducing costs, in the price or can have a certain competitive advantage. At present, SAIC, BYD and other companies have made breakthroughs, and it will take time to give an answer to how CORUN's CHS stands out. (Produced by Thinking Finance)■