The downstream demand of the product is strong. The company's business is mainly concentrated in the field of plastic packaging of electronic products, and the downstream industry is mainly electronic information manufacturing. According to the 2014 statistical bulletin of the electronic information industry, the added value of China's electronic information manufacturing industry increased by 12.2 percent in 2014 compared with the same period last year, which was 3.9 percentage points higher than the industrial average in the same period, and ranked seventh among the 41 industries in the country. The communique predicts that the added value of China's electronic information manufacturing industry will increase by about 10% in 2015 compared with the same period last year.
The company has a national layout and quick response to orders. The company has set up subsidiaries in major areas where electronic products are concentrated, which not only reduces transportation costs, but also meets the needs of Foxconn, Haier, Flextronics and other large electronic enterprises with a wide distribution of production capacity. at the same time, it has also opened up new local markets. Compared with the domestic listed companies in the same industry, the layout of the company is obviously superior. The company can complete all the work such as product design, raw material procurement, production and product distribution in a short time. At the same time, the company has taken measures such as standing safety inventory and providing "factory sticking" service to meet the delivery time requirements of customers adopting JIT mode of production.
Production capacity will increase significantly by the end of 2016. After the completion of the fund-raising project, a total of 28100 tons of plastic packaging products will be added, including 18800 tons of plastic packaging film and 9300 tons of plastic pallets, an increase of 117.5% and 132.9% respectively. In the fund-raising project, the company will focus on developing new products such as cold shrink visual packaging film, PE low foaming film and new recyclable plastic slide plates, so as to improve the added value of the products. The release of new capacity will help solve the problem of temporary shortage of capacity during peak order periods and meet the growing packaging needs of existing customers. At the same time, the improvement of the scientific and technological content of fund-raising projects will help to attract new orders, open up new market segments and improve product gross margins.
Based on electronics, open up new markets. At present, the company's business is mainly concentrated in the field of plastic packaging of electronic products, and will still be based on electronics in the future, and open up downstream industries such as food and medicine. And based on electronics is not simply to expand production capacity, but pay more attention to adjust the product structure, increase the proportion of high value-added products. The PE low foaming film, PE antistatic bag and clean tray products planned to be produced in the dust-free workshop are widely used in optoelectronics and microelectronics and other high-end electronics industries that require high cleanliness of packaging products. The completion of the dust-free workshop will also help the company to open up the food and pharmaceutical packaging market.
Valuation and rating: the downstream demand of the company is strong, and production capacity will increase significantly by the end of 2016. It is estimated that the company's basic earnings per share from 2015 to 2017 are 0.44,0.48 and 0.56 yuan respectively, based on the closing price of 38.82yuan on June 29, and the corresponding dynamic price-to-earnings ratios are 88 times, 81 times and 70 times respectively. The company's current market capitalization is only 3.1 billion yuan, giving the company an "overweight" rating for the first time.
Risk hint: product orders and fundraising project construction may not meet expectations.