Conclusion:

We give certain expectations to the company's move to establish Zhejiang Huangtai Wine Industry Co., Ltd., considering that there may be a lot of investment and various costs at the initial stage, but the income is limited, combined with the company's proposed acquisition of Chengde Villa and other factors, maintain the following forecasts and ratings: 2011-2013 revenue is 128 million yuan, 1.13 billion yuan and 1.81 billion yuan, the growth rate is 100,780% and 60%. The net profit reached 24.89 million yuan, 240 million yuan and 423 million yuan, with a growth rate of 14.1%, 867% and 68% respectively, corresponding to PE122 times, 20 times and 11 times. Based on 40 times of the floor valuation of second and third line wine, the target price in 2012 can reach about 40 yuan, with room for improvement of more than 76%, but in view of the uncertainty of mergers and acquisitions. And the dynamic PE measured by the company's own performance is too high, so it maintains the recommended rating.

Risk Tips:

If the M & A plan is not approved or the profitability of the acquired company does not meet expectations, the PE is too high, resulting in a valuation bubble.