Event: the company announced that it intends to issue 0.72-101 million shares of the company to Mr. Lin Shida at a price of 4.45 yuan per share and raise funds of 3.2-450 million yuan. After the completion of this offering, Mr. Lin Shida's shares accounted for 12.22% of the company's total share capital, making him the largest shareholder of the company, and Mr. Lin Shida's concerted actor, Hong Kong Northbell, became the second largest shareholder of the company. Ji'an Guangjia, the third largest shareholder, has promised to give up nominating and recommending any director candidates to the company after the completion of this offering. Fan Zhanhua, the fourth largest shareholder, and Guangdong Weiya, the fifth largest shareholder, gave up nominating and recommending any director candidates to the company in 2018, and the sixth and later shareholders held less than 1% of the shares. Mr. Lin Shida will become the controlling shareholder and actual controller of the listed company after the completion of this offering.
Comments: (1) after the completion of this increase, Northbelin will always become the real controller, the historical problems left over by the management of the company will be solved, and the governance structure will be clearer, which will help to bring more resources for the company's operation and development. enhance the company's competitive advantage in the field of cosmetics (2) in addition, the company has formulated a strategic development plan to focus its main resources on cosmetics and large consumer business, and announced on September 28, 2022 that it intends to transfer two wholly-owned subsidiaries engaged in turpentine deep processing business. in the future, the company will fully develop the cosmetic OEM business, which is expected to achieve greater development.
Profit forecast and investment advice: the growth rate of the cosmetics industry has slowed down since the second half of last year, but the whole still reflects a strong anti-risk attribute, and it is expected that the boom will continue to recover after the trough.
As the leader of cosmetics contract manufacturing, Northbell has obvious advantages in production capacity, manpower and customer cooperation, and has adapted to the new cosmetics regulations very well. In the future, with the economic recovery and the improvement of the industrial chain structure, the performance is expected to improve gradually. The company is expected to achieve a net profit of-1.0,1.50 and 220 million yuan in 22-24 years, giving the company 30 times PE in 23 years, corresponding to a reasonable value of 8.81yuan per share. Maintain the "overweight" rating.
Risk tips: the fund-raising progress of the fixed increase is not as expected; the prosperity of the cosmetics industry is declining; the expansion of new categories and new customers is not as expected.