Desai Power Battery Area

1. Small and medium-sized lithium battery leading enterprises:

The company is a leading small and medium-sized lithium battery enterprises, Apple in a variety of products occupy the position of a core supplier. With the improvement of the requirements of consumer electronics for battery shape and power management, the company is cooperating more closely with downstream consumer electronics companies and needs to participate in customer projects in the process of consumer electronics products from the establishment to the design. Therefore, the company's cooperation with the largest customer downstream is close, and the product supply share is stable. At the same time, the company is VIVO, OPPO, Xiaomi and other famous mobile phone brand battery core suppliers. The company's electric power power management system business has developed smoothly and has entered major international customers including Baidu and Makita. In 2014, sales reached 380 million yuan, accounting for about 13 % of blue microoperating income. Since this year, the company has vigorously expanded notebook battery products, and some products are already undergoing customer verification. Once successful in the notebook battery market, it is expected to form a new growth point in the future.

2. Power cell area thick hair:

Over the years, the company has a deep understanding of the direction of battery development in the field of battery development. As early as April 21, 2006, Desai invested 2.3 million yuan in a joint venture to establish Huizhou Yeneng Electronics Co., Ltd., which is an electric vehicle. Forward-looking research and development has been carried out on large-scale power management systems such as energy storage power stations. After many years of hard work, Billion Energy has become the leading power battery management system provider in China. At present, the company still holds a stake of 26.68 % of Billion Energy. In 2015, the company used the pre-billion energy technology as an accumulation. Huizhou Lanwei, Huizhou Battery, and Desai Xiwei and CHOIHHONGBEOM, the company's holding subsidiary, jointly established Huizhou Lanwei Xinyuan Technology Co., Ltd.. The main business is large-scale power cells, energy storage batteries and other power management systems and packaging integration business. Among them, Huizhou Lanwei and Huizhou batteries hold 56 % and 19 % respectively. Recently, the company responded quickly to market changes in the new energy field. The establishment of Lan Wei Xinyuan marks that the company will focus on the power cell field.

The year 2015 is a year of rapid development of electric vehicles. According to the China Automobile Industry Association, 136,700 new energy vehicles were sold in the first nine months of this year, an increase of 2.3 times over the previous year. International electric core manufacturers have invested in the establishment of new energy battery plants on the mainland. Samsung SDI's lithium battery factory in Xi'an was completed in October. It has an annual production capacity of 40,000 high-performance automotive power batteries. The Blue Vietnam Electronics(Hong Kong) Co., Ltd., which was established in 2012 by Desai Battery, is a holding subsidiary of Samsung to provide a small power management system in Vietnam. It has maintained close cooperation with Samsung for many years. We believe that the company's rhythm of entering the new energy field is well matched with the production rhythm of Samsung SDI Xi'an Plant, and it is expected to continue the cooperation relationship between small and medium-sized batteries and Samsung in the new energy field in the future. At the same time, Desai Xiwei has accumulated in the automotive electronics industry for many years, and has a cooperative relationship with FAW Volkswagen, SAIC General Motors and many other car companies, which can help the company's products to be imported into the automotive supply chain faster.

3. The reform of state-owned enterprises is on the line:

As a listed company, Desai Battery is affiliated with Huizhou Municipal SASAC. The company is a controlling company. Its main assets are 75 % of the shares of Huizhou Desai Battery Co., Ltd. and 75 % of the shares of Huizhou Blue Microelectronics Co., Ltd.. Huizhou Desai Battery Co., Ltd. is mainly responsible for battery packaging business, and Blue Microelectronics Co., Ltd. is mainly responsible for the production and sales of BMS protection panels. Since the company's main business is carried out by Blue Microelectronics and Huizhou Desai, the profit and loss of minority shareholders in 2014 reached 78.33 million, accounting for 25.04 % of total profits. The company and the July 11, 2015 announcement promised to actively promote the resolution of the company's minority shareholders 'rights and interests, and the subsequent minority shareholders' rights and interests are expected to be injected into listed companies. This will help the company's management and shareholders 'interests to be unified, while enhancing the company's performance.

4. Give Desai battery purchase Rating:

The company is the domestic lithium-ion battery packaging and protection board leading enterprises, actively expand the new energy battery business, the future reform of state-owned enterprises will inject new vitality into the company. We expect the company's EPS for 15-17 years to be 1.31, 1.57, and 1.99 yuan, respectively. The company's current stock price is valued at 36 times, 30 times, and 24 times for 15-17 years, giving a purchase rating.

5. Risk tips:

1. The increase in the price war of consumer electronic batteries has led to a continuous decline in gross profit

2. The introduction of the state-owned enterprise reform plan was slower than expected

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