标题：ZYNP CorporationA cylinder liner leader with a diversification strategy
发布日期：2016-01-18 8:11:20
内容： Investment positives ZYNP is the world’s largest cylinder liner producer with a capacityof >45mn pieces. It holds >40% market share in China and 10%in the world. We are optimistic about its expansion into PVcast-in cylinder liner market and its active diversification.Expanding PV cylinder liner capacity via acquisition. InChina, ZYNP supplies cylinder liners mainly to CV manufacturersand has a small share in the PV cylinder liner market. By buying70% of AHWA, ZYNP gained the production capacity of burrcylinder liners, creating synergy with its existing business lines.Longer value chain with more friction pair product mix. ZYNP has set up a subsidiary to produce bearing bushes forengines, and then gained capacity of 100mn piston rings throughacquiring Nanjing Feiyan Piston Ring Co. ZYNP is very likely toenter the piston and gudgeon pin market to gain an integratedmodularized supply capability. Enter aftermarket and intelligent manufacturing market.In 2015, ZYNP obtained national defense confidentialqualification (type III) and set up an intelligent equipmentsubsidiary. It entered the smart driving market through investingin Shenzhen Vastfly Tech. Financials PV cast-in cylinder liners will contribute more earnings to ZYNPas capacity expands. We expect 2016/17 profit to rise16.3%/14.1% YoY to Rmb233mn/265mn. Valuation and recommendation We are optimistic about the company’s presence in the PV cast-incylinder liner market and its active diversification. Initiate withBUY and TP of Rmb20 (50x/44x 2016/17 P/E). Risks Negative surprise in auto industry sales.
发布日期：2016-01-18 8:11:20
内容： Investment positives ZYNP is the world’s largest cylinder liner producer with a capacityof >45mn pieces. It holds >40% market share in China and 10%in the world. We are optimistic about its expansion into PVcast-in cylinder liner market and its active diversification.Expanding PV cylinder liner capacity via acquisition. InChina, ZYNP supplies cylinder liners mainly to CV manufacturersand has a small share in the PV cylinder liner market. By buying70% of AHWA, ZYNP gained the production capacity of burrcylinder liners, creating synergy with its existing business lines.Longer value chain with more friction pair product mix. ZYNP has set up a subsidiary to produce bearing bushes forengines, and then gained capacity of 100mn piston rings throughacquiring Nanjing Feiyan Piston Ring Co. ZYNP is very likely toenter the piston and gudgeon pin market to gain an integratedmodularized supply capability. Enter aftermarket and intelligent manufacturing market.In 2015, ZYNP obtained national defense confidentialqualification (type III) and set up an intelligent equipmentsubsidiary. It entered the smart driving market through investingin Shenzhen Vastfly Tech. Financials PV cast-in cylinder liners will contribute more earnings to ZYNPas capacity expands. We expect 2016/17 profit to rise16.3%/14.1% YoY to Rmb233mn/265mn. Valuation and recommendation We are optimistic about the company’s presence in the PV cast-incylinder liner market and its active diversification. Initiate withBUY and TP of Rmb20 (50x/44x 2016/17 P/E). Risks Negative surprise in auto industry sales.
