1. The company is mainly engaged in the research and development, production and sales of wire and cable products, including 35kv and below power cables, special cables, bare wires and cables for electrical equipment, with more than two hundred varieties and more than 10000 kinds of wire and cable products, which are widely used in power grid construction, power generation, metallurgy, petrochemical, machinery manufacturing and other economic fields.
2. In 2011, the output value of China's cable industry exceeded 1 trillion yuan, and the market capacity of the industry is huge. According to the plan of State Grid, the construction of smart grid in China will be divided into three stages, with a total investment of nearly 4 trillion yuan, which has entered the stage of large-scale construction. At this stage, State Grid Corporation invests a huge amount in the field of transmission, transformation and distribution every year, which will stimulate the market demand for wire and cable products, and there is still room for the growth of the cable industry in the next few years.
3. There are a large number of wire and cable enterprises in China, with small and medium-sized enterprises accounting for more than 90%, and the market concentration is relatively low. In terms of low-end products, the phenomenon of homogenization competition is serious. In sharp contrast with the low-end field, high-end products are still dependent on imports, and there is an obvious shortage of supply. With the increasingly fierce competition in the wire and cable industry, the development direction of the whole industry is expected to gradually shift from price competition to brand competition in the future.
4. From 2009 to 2011, the company achieved net profits of 48.66 million yuan, 87.96 million yuan and 118.81 million yuan respectively, and the net profits in 2010 and 2011 increased by 80.75% and 35.08% respectively compared with the same period last year. We believe that at present, the market scale of China's cable industry is already very large, and the growth rate may slow down in the future, and the competition in the industry is relatively fierce. We expect the company's performance growth rate to gradually decline in the next few years, and the overall growth rate is expected to be maintained at about 20%.
5. In recent years, the company's comprehensive gross profit margin has been maintained at about 14%. In the next two years, on the one hand, the industry competition will be more fierce, and the industry gross profit margin may decline; on the other hand, the company is increasing the R & D and production of special cables such as nuclear power cables and mineral insulated cables, and the gross profit margin of these cables is relatively high. Considering both positive and negative factors, we expect the company's comprehensive gross profit margin to remain stable in the next few years.
6. According to our model, we expect the company to achieve operating income of 2.575 billion yuan, 3.125 billion yuan and 3.75 billion yuan respectively from 2012 to 2014, and EPS0.91 yuan, 1.08 yuan and 1.28 yuan respectively. According to the data of Wande, from 2012 to 2014, the average price-to-earnings ratio of listed companies in the cable industry was 21.7x, 17x and 9.9x respectively. Based on the average PE of the cable industry, the reasonable price of long-distance cable in the secondary market should be 16.93yuan.
7. Performance forecast on the first day of listing
The company belongs to the power equipment industry with a price-to-earnings ratio of 23 times diluted earnings per share in 2011. We have counted the IPO price-earnings ratio and the rise and fall of the first day of listing of machinery and power equipment listed companies since April 2012, and believe that the IPO price-earnings ratio is at a low level among the machinery and power equipment listed companies listed since April 2012. The competition in the cable industry where the company is located is relatively fierce, and there is no obvious bright spot in the industry theme, but considering its low price-to-earnings ratio, it is expected to increase by about 5% on the first day of listing.
Purchase Tip: the online purchase time is: July 30, 2012 (T day, Monday) 9, 9, 11, 11, 30, 13, 00, 11, 15, 30, 13, 00, 11, 15, 30, 1300, 1300, 1300, 1300, 1300, 1500, 1300, 1300, 1500, 1300, 1300 and 1500. the purchase entrustment for a single securities account to participate in this online purchase is not less than 500 shares, and more than 500 shares must be an integer multiple of 500 shares, but not more than 22000 shares.