Main points of investment:
The company's main business is real estate and municipal landscaping, the industrial chain is complete, and its comprehensive competitiveness ranks among the top 20 national greening enterprises. The company is engaged in the integrated landscaping business of industrial chain, including landscape engineering construction, landscape design, seedling planting and landscaping maintenance. at present, it mainly provides landscape engineering construction and landscape design services for real estate development enterprises and government agencies and enterprises and institutions. The revenue from the construction of landscaping projects accounts for more than 93% of the main business income in the past three years, and the type of business is mainly municipal gardens, and the scale of municipal garden business has a trend of further expansion; the company attaches importance to landscape design business, the proportion of operating profits in the future is expected to increase, and increase the company's gross profit margin. The controlling shareholder and the actual control are Hui Quande and Yang Jing, and the total shareholding ratio before the issue is 73.01%.
The new type of urbanization and ecological livability require to boost the scale of garden output value. The process of urbanization in China in the future is still the main driving force of garden demand, and the demand for public environment improvement and housing quality improvement will promote the development of municipal gardens and real estate gardens. We estimate that in 2015, the market size of municipal landscaping will reach 290 billion yuan, and that of real estate gardens will reach 210 billion yuan. At present, there are more than 16000 enterprises in the garden industry, the industry resources are gathered to large enterprises, and the degree of market concentration is constantly improving at both the regional and company level. The company's main competitors include Oriental Garden, Tiehan Ecology, Lingnan Garden, Palm Garden, Universal Garden and photosynthetic Garden.
The company's competitive advantages: (1) complete qualifications, rich engineering experience: with urban landscaping enterprise first-class qualification, landscape engineering design special Class A qualification and other certificates, to complete a number of large-scale landscape engineering construction projects; (2) Cross-regional management capacity: the company's business is all over the main regions of the country, has 10 subsidiaries, cross-district management balanced development. (3) strong R & D strength: the company has formed a number of mature technologies in plant materials, engineering technology, garden maintenance and other aspects.
The driving factors for the company's future growth are: (1) balanced business development: the company will consolidate the landscape engineering construction business based on municipal gardens, expand landscape design, nursery cultivation and greening and maintenance business, improve the development of the industrial chain; (2) improve the mechanism of personnel training and research and development; (3) accelerate market development.
Risk factors: real estate industry risk, working capital shortage risk, bad debt risk of accounts receivable and so on.
Reasonable valuation range: we estimate that the EPS of the company from 2015 to 17 is 1.15, 1.39 and 1.67 yuan respectively. With reference to the valuation of the comparable company, we give the company 30-35 times PE in 2015, with a reasonable value range of 34.5-40.3 yuan. The issue price is 18.98 yuan, corresponding to the corresponding PE of 2016-17 is 16-14-11X. The reasonable increase is 81.6% to 112%.
