The company is located in Chaozhou, the “porcelain capital of China”. It was founded in 2002. It is a modern enterprise integrating design, R&D, production and sales of ceramic products. It specializes in daily-use ceramics, hotel supplies, household porcelain, ceramic wine bottles, art porcelain, etc., and uses a combination of ODM/OEM and independent brands, and its products are mainly sold to overseas markets. The company has an outstanding position in the daily-use ceramics industry. Over the years, it has insisted on implementing a brand strategy, and the “Songfa” brand positions itself in the high-end daily-use porcelain market.
China's daily-use ceramics industry has a large number of manufacturers. The industry concentration is low, the degree of marketization is high, and the industry is distributed in clusters. Technology, qualifications and channel resources form barriers to entry into the industry. Under individualized demand and green consumption trends, one of the important expressions of the future increase in domestic daily-use ceramics market capacity will be an increase in consumption due to higher product grades and prices. Through brand building, ceramic enterprises will gradually shift from product export to brand output, thus continuously improving the added value and market competitiveness of products.
Market development and increased profit margins are expected to be the main driving forces for performance growth. The company plans to upgrade the technology of the existing production line, improve production efficiency and product excellence, and expand the scale of production to meet order requirements. It is expected that after the implementation of the fund-raising investment project, the overall level of equipment and technology will be significantly improved, and profitability will be enhanced as the technical content and added value of the product increases. It is expected that in the future, the company's ability to control raw materials and costs is expected to increase with upstream penetration; on the other hand, it will be further consolidated through expansion of production capacity and brand building to increase the company's current market share in domestic and foreign domestic household ceramics, hotel porcelain, ceramic wine bottles, etc. At the same time, the construction of domestic sales networks and market development efforts will be strengthened, the company's internal and export business structure will be optimized, and industrial upgrading will be achieved by speeding up R&D and design, marketing, etc., leading the development of daily-use ceramics in the direction of boutique and personalization.
Profit forecast: In 2015-17, Songfa Co., Ltd. is expected to achieve net profit attributable to the parent company of 5396, 6075, and 66.59 million yuan respectively, up 10.84%, 12.59%, and 9.62%, corresponding to EPS of 0.61, 0.69, and 0.76 yuan respectively.
Valuation: The price-earnings ratio of ceramic manufacturers currently close to the company's business was selected and compared, and the company was given a price-earnings ratio of 30 times in 2015, corresponding to a reasonable value of 18.39 yuan after listing.
Major uncertainties: risk of exchange rate fluctuations, anti-dumping policies, export tax rebate policies, and fluctuations in raw material prices on production and operation.