Since its establishment in 1994, Wanxun Automation has focused on the industrial automation instrument industry, and its main products include electric actuators, flow meters, signal conditioning instruments, control valves and other instruments. The products have high technical content and strong competitiveness in the market. in recent years, the gross profit margin of the main products is more than 45%. The instruments are involved in a wide range of fields, resulting in a wide variety of products, and a wide range of product series and technical paths. The characteristics of the industry determine the low concentration of the industry, each enterprise can only produce part of the products and choose a few related technology paths. China's middle and high-end market is mainly occupied by foreign brand products, and some domestic enterprises gradually stand out through international cooperation. Foreign enterprises are divided into three levels: international cross-industry comprehensive groups, professional large companies and professional small and medium-sized companies.
Different from other domestic enterprises, Waxun Automation chooses professional small companies as the object of cooperation, these professional small companies focus on a certain field, master the core technology of a few products, and give full play to the technology of the products they produce. but the scale is small, so it does not have the ability of global production and sales. Through cooperation, the two sides complement each other, depend on each other, and achieve a win-win situation.
Due to the wide variety of instrument industries, even large international enterprises, such as Siemens and ABB, are unable to produce all instrument products. And there are some subdivided products, the total market capacity is not very large, resulting in large enterprises are not willing to do, small enterprises do not have the technical strength to do the situation. Wanxun controls chooses this niche product for R & D and production to avoid direct competition with large international companies.
Through cooperation with international partners in technological research and development, we have accumulated rich R & D experience, and our independent R & D strength has been continuously enhanced. Enhanced technical strength and the localization of components have led to a steady gross profit margin, rising from 40% in 2007 to 53% in the first half of the decade. In the future, with the optimization of product structure and the localization of components, product gross margin is expected to be further improved.
Our forecast company's earnings per share from 2010 to 2012 are 0.51,0.69 and 0.99 yuan respectively. Combined with the growth of the company and the valuation level of gem, we believe that the reasonable valuation level of the company is 35-40 times PE in 2010, and the corresponding reasonable stock price range is 17.85-20.4 yuan.
The company has the risk of multi-product management and business cooperation model.