Nengke (603859) Comments: Public Offering to Help Smart Manufacturing Pilot

Nengke (603859) Comments: Public Offering to Help Smart Manufacturing Pilot
I. Event: On November 25, the company publicly issued additional A shares to open subscriptions.The number of additional issues is 1,289.20,000 shares, 3 trillion of funds to be raised, of which 1.The $ 34 million budget “Product Life Cycle Collaboration Platform Based on Digital Alternatives” project, 76 million yuan is planned to be invested in the “High-end Manufacturing Assembly System Solution” project (“Engine Digital Assembly System Solution” and “Cylinder Workpiece Intelligence”Docking and assembling “system solutions”), and the remaining supplementary working capital.The results of the issuance and placing were announced on November 28. The successful issue plus resumption of trading on November 29.  Second, comments: Strengthen the first-mover advantage, expand business boundaries, and respond to the broad market. Strengthen the first-mover advantage: The company’s “digital replacement” technology is in its infancy internally, and Nenko has completed the Lenovo-made digital replacement.The project has the technical advantages of being recognized by major customers, and its first-mover advantage is obvious.Smart manufacturing as “Industry 4.The core of “0” is the driving force for the transformation and upgrading of the manufacturing industry. It is estimated that the market size of the intelligent manufacturing industry will reach 1 in 2019.US $ 9 trillion, of which the industrial software field of Nenko is the core of intelligent manufacturing, and the market size will reach US $ 168 billion.  According to the Prospective Industry Research Institute, the compound growth rate of the domestic industrial software industry market will exceed 10% in the next few years.  Nenko has increased its expansion and strengthened its first-mover advantage.  Expanding business boundaries: Nenko started from smart electrical, followed customer needs, and developed into smart manufacturing business, providing enterprises with end-to-end integration centered on product life cycle (PLM) and production process management (MES) as coreIntegration and business integration centered on enterprise resource planning (ERP).Revenue from the smart manufacturing business has grown 392% over the past three years.In the first half of this year, the smart manufacturing business accounted for more than three-quarters of its revenue.The success of the public increase will further expand the boundaries of the business and respond to the needs of different customers.The “engine digital assembly system solution” purchased by the company is very forward-looking. Due to the arrival of “National Six” standard, engine manufacturers will reinvest in production lines. Within 200 years, more than 200 assembly lines across the country have potential demand for the company’s products.  Third, investment recommendations We expect the EPS for 2019-2021 to be 0.76/1合肥夜网.15/1.61 yuan, the corresponding PE is 31.3/20.5/14.7 times, PE (TTM) of the intelligent manufacturing sector is 25 times, maintaining the “recommended” level.  Fourth, risk warning: the receivables account period is further lengthened, and the new orders fall below expectations.