Key points of investment
The company's main products are Starlight series combine harvesters, which can be used to harvest crops such as wheat, rice, and rapeseed. Downstream includes distribution channel providers and terminal agricultural machinery users. The company is a technology-intensive and capital-intensive industry. In recent years, the company's brand influence has continued to increase, the customer base has continued to be consolidated, and a good brand awareness and customer base have been established; in 2012, the market share in the field of combine harvesters was 1.01%.
From 2011 to 2014, the company's revenue and net profit fluctuated to a certain extent. In 2011, the company achieved operating income of 505 million yuan and net profit attributable to the parent company of 108 million yuan. By 2014, the company achieved operating income of 576 million yuan, and net profit attributable to the parent company was 126 million yuan. Among them, the company's revenue and net profit achieved sharp increases of 50% and 63% respectively in 2012, while the company's revenue and net profit declined to a certain extent in 2013 and 2014, respectively.
Future demand for the company's products may develop steadily. The current market demand in China's harvesting machinery industry mainly comes from new demand and replacement demand. According to the demand forecast of the Ministry of Industry and Information Technology, from 2011 to 2015, the total demand for combine harvesters was about 800,000 units, with an average of over 150,000 units per year. At the same time, the number of combine harvesters owned in China reached 1,278,800 units in 2012, creating a continuous demand for replacement.
Profit forecast and investment advice: We forecast the company's EPS in 2015 to be 0.74 yuan. Referring to the valuations of the comparable company's Xinyan Shares, JAC Dynamics, and Yituo Co., Ltd., and considering the company's future demand for the company's products, the company's competitiveness, and the current investment style where new shares are sought, we think it is more reasonable to give the company 30 to 40 times in 2015. The reasonable stock price is 22.2 to 29.6 yuan.
Risk warning: risk of a single product structure; risk of low market share and weak market control ability; risk of policy change; risk of seasonal fluctuations in production and operation.