<P>Cuba contract is basically fixed. It’s said that China to Cuba’s national credit quota is approved by Ministry of Finance, Ministry of Foreign Affairs and Ministry of Commerce collectively, based on which the company will get the export insurance policy from China Export &amp; Credit Insurance Corp. naturally. Cuba export contract is basically fixed, but the contract content is emended largely: the previous 7500 coaches (executed in one year) are changed to 5000 coaches (executed in 3 years). Considering RMB appreciation, the company is negotiating selling price rally with Cuba and preparing for signning supplemental agreement, in order to elude Rmb appreciation effects.<br><br>Radical export plan. In 2007, the company plans on exporting 5000 median-large coaches (including executed volume of Cuba contract for 2007), which means the company has other export scheme besides Cuba of over 3333 coaches, up 85% compared with 1800 coaches of 2006. <br><br>Adjusted earning forecast. Historically, compared with domestic orders, the company’s export order had at least 4% higher gross profit margin and net profit margin. If estimate is based on previous average export price of Rmb0.53 million and 4% net profit margin, Cuba contract would totally bring sales revenue up to Rmb2.65 billion, net profit of Rmb106 million, or 0.27 yuan EPS. Therefore, Cuba contract would add 0.09 yuan EPS annually in 2007—2009. <br>Obtained 20 million shares of China Life in share placement. Cooperating with China National Light Industry (Group) Corp., Yutong obtained 20 million shares of China Life in share placement. If estimate is based on 20 yuan share price rally, the company currently has book profit of Rmb400 million, or 1.00 yuan EPS. <br>Increase the target price. Considering the expectation that China will become the world bus manufacturing center and Yutong has sustainable export capacity, we increase the company’s bus business target PE from 20× to 25×; While we value its China Life equity investment and property business at 1× PE. We increase the company’s 12-month target price to 18.8 yuan. Based on the closing price of 15.47 yuan on Jan.10, the target growth is 22%. If calculated from 11 December 2006 on which the report of Yutong Bus: An Evergreen Tree Among Auto Shares was released, the target growth is 68%. Furthermore, the positive impact of consolidated foreign and domestic companies’ income tax is not taken into account in the above valuation. The company’s current income tax is 33%. </P>
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[此贴子已经被作者于2007-1-18 16:41:32编辑过]
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