The company is a leading private enterprise in large and medium-sized motor production enterprises. Since its establishment in 2003, the company has focused on the design, production, sales and service of large and medium-sized AC / DC motor products. The company's products include DC motors, AC motors, generators, test power systems and others. DC motors are the company's largest source of revenue, accounting for about 40%. In 2013, the output of DC motor and large and medium-sized AC high voltage motor ranked fourth and 14th respectively in the backbone enterprises of the industry.
The downstream applications of large and medium-sized motors are mainly heavy industry, the demand is periodic, and the products are more sticky to specific customers because of their customized characteristics. Large and medium-sized motors are widely used in metallurgy, electric power, petrochemical, coal, mining, building materials and other industries, with a high proportion of heavy industry. In recent years, due to the impact of the macroeconomic situation, the problem of overcapacity of some industrial products is more serious, the corresponding demand for large and medium-sized motors is relatively low, showing a steady growth trend. At the same time, large and medium-sized motors have the characteristics of customized production, so the established customer cooperation relationship is more stable and continuous, strong stickiness.
The technical threshold of large and medium-sized motors is higher, the competition pattern is relatively mild, and the product profitability is obviously stronger than that of small and medium-sized motors. The profit level of the whole motor industry shows a U-shaped distribution, and the large motors and micro motors at both ends have strong profitability because of the high threshold of talent and technical barriers, while most A-share enterprises engaged in small and medium-sized power motors are in the middle of the U-shaped curve, with a gross profit margin of only about 20%. Due to the characteristics of its products, its gross profit margin is as high as 35-36, and its net profit rate is as high as 15%. Its competitors are mainly a small number of large state-owned enterprises, including Shangdian, Harbin Power, Xiangdian, Jiadian and so on.
The company intends to raise 267 million funds, and the project is mainly invested in the production capacity expansion of large and medium-sized high-efficiency and energy-saving motors. The total share capital of the company before the issue is 60 million shares, this time a total of 20 million shares are issued at an issue price of 14.88 yuan, the total amount of funds raised is 297.6 million yuan, and the net amount of funds raised after deducting the issuance expenses is 267.22 million yuan. It is mainly invested in large and medium-sized high-efficiency and energy-saving motor production base construction projects, large-scale motor transformation projects, large and medium-sized high-efficiency and energy-saving motor R & D center construction projects. The issued share capital of the company is 80 million, and the total market capitalization corresponding to the issue price is 1.19 billion.
Profit forecast and investment advice: the company's net profit belonging to the parent company is expected to increase by 6.8%, 15% and 15% in 2014, 2015 and 2016, respectively, and the corresponding EPS is 0.80,0.92 and 1.06 yuan, respectively. Considering the growth space and development potential of the company, we believe that the reasonable pricing range of the company is between 16 and 17.6 yuan, corresponding to a dynamic price-to-earnings ratio of 20 to 22 times in 2014.
Risk hint: the prosperity of the downstream industry is low, and if the fund-raising projects do not meet the expectations, there will be idle production capacity.