Main points of investment
The company is an enterprise mainly engaged in the research and development, design, production and sales of precision cleaning equipment. After more than ten years of development, the company has formed a business pattern with precision cleaning equipment as the core, electroplating equipment and water treatment as the two wings, which is not only conducive to enhance the customer service capacity of the company's main business precision cleaning equipment business, but also help to enhance the overall competitiveness of the company and disperse the operating risks of the company.
The company's main business development is steady, and the utilization of production capacity is relatively stable. The operating rate of the company's key equipment is more than 65%, and the operating income in the first half of 2016 was 152 million yuan, a decrease of 7.47% over the same period last year, of which more than 50% came from precision cleaning equipment and more than 35% from electroplating equipment and water treatment equipment.
The downstream industry of precision cleaning equipment covers almost all industrial fields, with a market space of more than 10 billion yuan. The downstream industries of precision cleaning equipment industry include not only the fast-growing consumer electronics industry, flat panel display industry, photovoltaic industry and other emerging industries, but also traditional auto parts, nuclear industry, equipment manufacturing, petrochemical, non-ferrous metals and other industries. Benefiting from the continuous expansion of the application field, the uplink space of precision cleaning equipment is still very large. Since 2006, the domestic precision cleaning equipment market has reached an average annual compound growth rate of 24%, with a market size of nearly 20 billion yuan in 2012.
Profit forecast and valuation: based on the issued equity, we predict that the EPS of the company from 2016 to 2018 will be 0.43,0.48,0.54 yuan respectively, an increase of 8.60%, 12.02% and 12.46% respectively over the same period last year. With reference to the valuation of the comparable company, and taking into account the future demand of the company's products and the competitiveness of the company, we think that it is reasonable to give the company 30 times PE in 2016, and the reasonable share price is 12.90 yuan to 17.20 yuan. Coverage for the first time, no rating for the time being.
Risk tips: the risk of slowing down the fixed asset investment of downstream customers; the expansion of new business is not as expected; the risk of intensified market competition.
