Famous carving shares: a leading enterprise in architectural decoration. MingDiao Co., Ltd. is a national well-known home decoration enterprise integrating home design services, engineering construction services and public decoration design services. in 2015, the company achieved an income of 673 million yuan and a net profit of 48 million yuan, an increase of-4.46% and-4.15% respectively over the same period last year. The actual control of the company is the concerted actors Lan Jixiao, Lin Jincheng and Peng Xuwen, who together hold 88.45% of the shares of Mingdao.
The scale of the home improvement market is huge, and the market concentration is low. In 2015, the total output value of the national architectural decoration industry was 3.4 trillion yuan, an increase of 230 billion yuan or 7 percent over 2014, of which the total output value of the home decoration industry in 2015 was about 1.6 trillion yuan, or 10.01%. The enterprises in the home decoration industry are scattered, with a large number of enterprises and low market concentration, many and small enterprises, and serious homogeneous competition. From 2010 to 2014, the average market share of Dongyi Risheng and famous carving decoration is only about 0.16%. The home decoration market is large but the revenue scale of the home decoration company is small, and the gross profit margin of the home decoration company is high but the net profit rate is low. The reason is that the expenses during the home decoration company are difficult to control and remain high, resulting in weak profitability of the company.
Residential decoration business-based, outstanding design strength. In 2015, the company's residential decoration business income was 514 million yuan, accounting for 78.13% of revenue, contributing to the main income, commodity sales, public building decoration income of 139 million yuan, 5 million yuan respectively; Shenzhen area income accounted for a relatively high, between 50% and 60%. Over the years, famous sculptures have adhered to the development road of "standardization, specialization and collectivization", and have won many honors, such as the first-class qualification of national engineering design and construction, national decoration excellent pacesetter enterprises, and so on. The company ranks among the top 10 in the category of home decoration in the "Top 100 Enterprises list of China's Home Decoration Industry in 2014" issued by the China Architectural Decoration Association. The company has advanced design concept and has the advantage of integrated platform.
The company's future development: the company will further improve the domestic marketing network layout on the basis of the existing 50 business outlets; the company will use this fund-raising to expand the design R & D center and improve the research and development system; the company will implement the home decoration O2O model development plan, layout the O2O field of the home decoration industry; the company will also implement the smart home system development plan to provide customers with more in-depth home services.
Profit forecast and valuation: the company's net profit from 2016 to 2018 is expected to be 50 million yuan, 59 million yuan and 65 million yuan respectively, and the EPS from 2016 to 2018 calculated on the basis of 66.67 million shares of issued share capital is 0.75,0.89 and 0.98 yuan respectively. With reference to the valuation level of comparable listed companies, combined with the future development space of the company, it is considered that 35-45 times PE can be given in 2016, and the corresponding price range is 26.4-33.9 yuan.
Risk hints: macroeconomic downside risks, industry prosperity downside
