Baolong Automotive(SH:603197) Minsheng Securities·2024-10-30 14:43Investment Rating - The report gives a positive investment rating for the convertible bond, suggesting a 15% premium on the first day of listing, with an expected listing price of around 112 RMB [6][34]. Core Insights - The company, Baolong Technology, is positioned as a leading supplier in the automotive parts industry, specifically in exhaust system components and tire pressure monitoring systems (TPMS) [10][31]. - The company has shown significant revenue growth, with a 21.68% increase in revenue for the first half of 2024 compared to the same period in the previous year [25][29]. - The convertible bond has a high pure bond value and a substantial debt floor protection, making it an attractive investment opportunity [3][6]. Summary by Sections 1. Convertible Bond Basic Terms and Subscription Value Analysis - The Baolong convertible bond has an issuance scale of 1.39 billion RMB, with a bond and issuer rating of AA/AA [3][4]. - The conversion price is set at 40.11 RMB, with a conversion value of 97.06 RMB as of October 29, 2024 [3][4]. - The dilution pressure on total share capital is 16.34%, indicating a significant impact if fully converted [3][5]. 2. Baolong Technology's Fundamental Analysis 2.1 Industry and Supply Chain Analysis - The company is a major player in the automotive parts sector, focusing on intelligent and lightweight products [10][31]. - It has established a strong market presence in both domestic and international markets, with a notable share in the TPMS segment [10][11]. 2.2 Shareholding Structure Analysis - As of October 28, 2024, the major shareholders include Chen Hongling and Zhang Zuqiu, holding a combined 27.37% of the total shares [23][24]. 2.3 Company Operating Performance - In 2024H1, the company achieved a revenue of 3.184 billion RMB, with a net profit of 148 million RMB, reflecting a decline of 19.40% year-on-year [25][29]. - The gross margin for the same period was 27.12%, showing a slight decrease compared to previous periods [25][29]. 2.4 Peer Comparison and Competitive Advantages - Baolong Technology's revenue growth rate of 21.68% in 2024H1 outperformed the average growth rate of its peers [29][30]. - The company maintains a competitive edge through its established relationships with major automotive manufacturers and its strong R&D capabilities [31][32]. 3. Fundraising Project Analysis - The funds raised from the convertible bond will be allocated to various projects, including the expansion of intelligent manufacturing for air suspension systems [34][35]. - The expected internal rate of return for the air suspension system project is 19.48%, indicating a promising investment opportunity [34][35].