Weifu Hi-Tech Focuses on the Implementation of Light Commercial Vehicle Country 3 Standards and the Development of New Businesses
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Bosch Diesel: The impact of EGR is not as big as expected. At present, the production, sales and profitability of Bosch Diesel are better than the company expected at the beginning of the year, and the market for heavy vehicles still maintains a market share of about 50%. In the first quarter of 2009, Bosch's loss of approximately 100 million yuan in gasoline and diesel began to make profits in April. We maintain our previous judgment that the sales volume of Bosch's common diesel rail system in 2009 was similar to that of the same period of last year, but the overall profit may have dropped by around 20%.
Weifu Lida: The benefit cost has dropped and the low-end passenger cars have grown rapidly, making profits or exceeding expectations. Affected by structural tax cuts and autos going to the countryside, Weifu Lida has significantly accelerated the growth of micro-customer and self-owned brand cars. Affected by the decline in the prices of raw materials, rare earth and platinum, we expect the annual net profit to reach around RMB 40 million, which will contribute EPS 0.06 to Weifu.
Weifu Jinning -- Develop electronically controlled VE pumps to expand profitability. The company has successfully developed an electronically controlled VE pump system that satisfies the country's 3 emission standards, completed the test of several models of more than 10 host plants, and realized the production of small batches. We believe that the cost-effectiveness of this system is high and it may be the most widely used in light commercial vehicles. With the implementation of the light commercial vehicle country 3 emission standards on July 1, 2009, the company will face better growth opportunities.
Weifu parent company: open source and reduce expenditure. The company has implemented a series of measures to reduce costs and increase efficiency, increase revenue, and reduce expenditure. In terms of cost reduction, it will reduce personnel, improve efficiency, reduce interest-bearing liabilities, and strengthen management of receivables. In the area of ​​open source, the supporting scope and supporting quantity of localization of Bosch Diesel are improved. Following the batch matching of pumps, the supporting design of the rails has been completed. At the same time, Bosch's injector business is actively implemented to transfer to the company; The coverage of injection pump products extends the pump business from vehicles to construction machinery and boats. In addition, we actively expand other key automotive components other than fuel injection systems, such as superchargers, to cultivate new growth points.
Maintain "recommended" rating. Maintain the company's 2009-2011 EPS 0.44 yuan, 0.59 yuan, 0.79 yuan performance forecast, the company's performance growth in the next three years about 30%, giving the next 6-12 months target price of 13 yuan, corresponding to 30 times P/E in 2009 , maintain the "recommended" rating.