Prince new material: the leading domestic plastic packaging enterprise. The company is mainly engaged in the research and development, design, production and sales of plastic packaging materials and products, including plastic packaging film, plastic tray and plastic cushioning material. In the first three quarters of 2014, the company achieved 338 million yuan in main business income and 21.64 million yuan in net profit, while in 2013, the main business income was 477 million yuan and net profit was 39.26 million yuan.
With the rapid development of downstream, there is a lot of room for the development of plastic packaging materials. The downstream industries of plastic packaging industry mainly include information electronics manufacturing industry, food industry, pharmaceutical manufacturing industry and so on. These industries are in the stage of steady development or even explosive development in recent years. According to the forecast of the China Packaging Federation, from 2011 to 2015, the compound annual growth rate of China's plastic packaging market for electronic products will reach 16.75%, and the market size will reach 30.028 billion yuan in 2015.
Production of national layout, with a first-mover advantage. The company has 14 subsidiaries and 2 branches in Langfang, Qingdao, Yantai and other places. The establishment of subsidiaries has opened up a new market space for the company, reduced transportation costs, enhanced the company's service capacity and customer response ability, and played a very important role in maintaining the relationship with major customers. it has laid the foundation for the stable development of the company, thus establishing the company's leading competitive position in the industry.
IPO fundraising project is an important guarantee for future performance growth. The company intends to raise 185 million yuan this time, which is mainly used for the construction of production bases in Shenzhen, Qingdao and Chengdu, the national layout, and supplementary working capital projects. The fund-raising project is expected to be completed within 2 years, which can double the existing production capacity. In view of the rapid development of downstream demand, capacity can be effectively released, performance is expected to achieve sustained growth.
Profit forecast and investment advice. We predict that the diluted earnings per share of Prince Xincai from 2014 to 2016 are 0.41 yuan 0.46 yuan 0.51 yuan respectively. According to the valuation method of comparable company's price-to-earnings ratio, we think that the reasonable price range of Prince's new material is 13.80-18.40 yuan. According to the issue price, as well as the valuation results, give the overweight rating.
Risk factors. The risk of excessive concentration of market and customers, the risk of fluctuation of raw material prices, the risk of rising labor costs year by year, the management risk of scale expansion and cross-regional operation.