Company profile

Since its establishment in 2002, the company has been engaged in R&D, production and sales of heat exchanger equipment and precision presses, and its main business has not changed. According to a certificate issued by the Forging Machinery Branch of the China Machine Tool Industry Association, the air conditioning heat exchanger equipment products produced by the company (including high-speed precision presses for air conditioning fins, tube expanders for heat exchangers, fully automatic hairpin tube benders, etc.) have had the highest market share in the industry since 2011.

The capital raised by the company in this offering will be invested in a high-speed precision press production line construction project with an annual output of 240 units, a technical transformation project to expand production of 310 air conditioning and heat exchanger equipment per year, and an engineering technology research and development center project. The total investment of the project is 240.7 million yuan, and it plans to use the capital raised to invest 137.06 million yuan. The issuer's use of the capital raised this time is all centered around the company's main business. The additional production capacity is an expansion of the company's existing superior product production capacity. The fund-raising projects have gone through strict, careful, and professional feasibility analysis and verification, and have good market prospects and economic benefits.

Profit forecasting

According to the progress of fund-raising project construction, we expect net profit attributable to the parent company in 2014-2016 to be 33.61 million yuan, 53.39 million yuan and 85.06 million yuan respectively, with year-on-year growth rates of -3.85%, 58.87%, and 59.33%, respectively. The corresponding basic earnings per share were 0.42 yuan, 0.67 yuan and 1.06 yuan respectively.

Pricing conclusion

Taking into account the valuation situation of comparable companies in the same industry and the company's own growth, we believe that the reasonable valuation price given to the company was 16.38 yuan to 19.74 yuan, corresponding to a price-earnings ratio of 39-47 times the earnings per share in 2014.