标题：JANUS (Dongguan) Precision Components M&A anticipation on the rise for its leading presence in Industry 4.0
发布日期：2016-01-25 10:46:21
内容： Event: Janus gained nearly 5% on Jan. 21 despite broader losses. We believe the stock's outperformance could be attributed to its clear strategy of "M&As + a national demonstrated project". We summarize our updated view as follows. Comments: Janus has highly flexible factory workshops at the site of its demonstrated project. Outstanding R&D capabilities are supported by a simulation system for workshop operations and product processing. Janus has a sophisticated system to simulate workshop operations and product processing, which can substantially enhance Janus' capabilities in assisting a third party to develop smart factory projects: (1) The simulation system can help identify areas of risks and design defects at the very beginning of project planning, which can serve as an important reference for the feasibility of projects and can therefore significantly reduce the risks and costs for clients; (2) The simulation system can cut down the time required for R&D on smart factory projects by 40%; (3) Product processing simulations can substantially lower the cost from trial and error. We believe Janus is well positioned to become the pioneer in the provision of smart factory solutions domestically, leveraging its experience from the implementation of the national demonstrated project and constant improvement of its simulation s ystem. Seeking 100% self-sufficiency in supply of smart equipment adds fuel to M&A expectations. A smart factory is normally comprised of five levels of systems in a bottom-up approach: smart equipment, Internet of Things in the industrial sense, the operational system, the data center and the intelligent presentation interface, and smart equipment is at the bottom level of a smart factory. The Company plans to further gain a presence in software and hardware of smart factories in 2016, which has shored up market expectations of more M&As. Currently, its subsidiary Shenzhen Create Century Machinery, a CNC machine tool manufacturer acquired in 2H2015, is working on self-made robotics, while Shenzhen Jiayi Precision Automation Technology, another subsidiary acquired in 2H2015, can produce jigs & fixtures, automatic test equipment, VGA-equipped trolleys and other smart-factory facilities. We believe the Company has the potential to become 100% self sufficient at the smart equipment level going forward. Bullish on headroom in CNC automation upgrade services; metal cell phone casings likely to beat expectations. (1) We believe Janus can expect good market potential in the space of CNC automation by providing both facilities and services to facilitate the upgrades, as the processing of metal casings or glass covers for consumer electronic products goes through a number of procedures, such as loading/unloading of materials and cleaning, that can benefit from automation upgrades; (2) We think Janus can further increase its shipments by working with additional clients such as Huawei Technologies and OPPO Electronics other than Samsung in 2016 (Janus remains a major supplier of metal casings for Samsung cell phones). Potential risks: Disappointing progress in new businesses; earnings of acquired companies failing to meet expectations. Investment ideas. We maintain our 2015-17E EPS forecasts of Rmb-0.46/1.14/1.38 and reiterate our BUY rating with TP unchanged at Rmb46 (40x 2016E PE) for: (i) As the operator of a national demonstration project in possession of scarce industry resources, we believe Janus is poised to significantly benefit from policy support going forward and receive orders from a large number of projects; (ii) We foresee resilient earnings from subsidiaries given rapid growth in automation demand from consumer electronics; and (iii) We are positive on Janus's potential in building business presence in the long run.
发布日期：2016-01-25 10:46:21
内容： Event: Janus gained nearly 5% on Jan. 21 despite broader losses. We believe the stock's outperformance could be attributed to its clear strategy of "M&As + a national demonstrated project". We summarize our updated view as follows. Comments: Janus has highly flexible factory workshops at the site of its demonstrated project. Outstanding R&D capabilities are supported by a simulation system for workshop operations and product processing. Janus has a sophisticated system to simulate workshop operations and product processing, which can substantially enhance Janus' capabilities in assisting a third party to develop smart factory projects: (1) The simulation system can help identify areas of risks and design defects at the very beginning of project planning, which can serve as an important reference for the feasibility of projects and can therefore significantly reduce the risks and costs for clients; (2) The simulation system can cut down the time required for R&D on smart factory projects by 40%; (3) Product processing simulations can substantially lower the cost from trial and error. We believe Janus is well positioned to become the pioneer in the provision of smart factory solutions domestically, leveraging its experience from the implementation of the national demonstrated project and constant improvement of its simulation s ystem. Seeking 100% self-sufficiency in supply of smart equipment adds fuel to M&A expectations. A smart factory is normally comprised of five levels of systems in a bottom-up approach: smart equipment, Internet of Things in the industrial sense, the operational system, the data center and the intelligent presentation interface, and smart equipment is at the bottom level of a smart factory. The Company plans to further gain a presence in software and hardware of smart factories in 2016, which has shored up market expectations of more M&As. Currently, its subsidiary Shenzhen Create Century Machinery, a CNC machine tool manufacturer acquired in 2H2015, is working on self-made robotics, while Shenzhen Jiayi Precision Automation Technology, another subsidiary acquired in 2H2015, can produce jigs & fixtures, automatic test equipment, VGA-equipped trolleys and other smart-factory facilities. We believe the Company has the potential to become 100% self sufficient at the smart equipment level going forward. Bullish on headroom in CNC automation upgrade services; metal cell phone casings likely to beat expectations. (1) We believe Janus can expect good market potential in the space of CNC automation by providing both facilities and services to facilitate the upgrades, as the processing of metal casings or glass covers for consumer electronic products goes through a number of procedures, such as loading/unloading of materials and cleaning, that can benefit from automation upgrades; (2) We think Janus can further increase its shipments by working with additional clients such as Huawei Technologies and OPPO Electronics other than Samsung in 2016 (Janus remains a major supplier of metal casings for Samsung cell phones). Potential risks: Disappointing progress in new businesses; earnings of acquired companies failing to meet expectations. Investment ideas. We maintain our 2015-17E EPS forecasts of Rmb-0.46/1.14/1.38 and reiterate our BUY rating with TP unchanged at Rmb46 (40x 2016E PE) for: (i) As the operator of a national demonstration project in possession of scarce industry resources, we believe Janus is poised to significantly benefit from policy support going forward and receive orders from a large number of projects; (ii) We foresee resilient earnings from subsidiaries given rapid growth in automation demand from consumer electronics; and (iii) We are positive on Janus's potential in building business presence in the long run.
