Main points of investment:
Deep ploughing solar water heater industry, diversified business upgrading transformation: the company is the leading solar water heater industry, with "Sun Rain", "four Seasons Mu Song" two famous brands. Among them, the trademark of "four Seasons Mu GE" is a well-known trademark in China and one of the top ten leading brands, and the "Sunrise Oriental Sun Rain" solar water heater is rated as a Chinese famous brand. At the same time, the company actively develops the business of the combination of solar energy and air energy, vigorously develops the business of household and commercial water purifiers, and strives to create the core competitiveness of industrial chain coordination.
Omni-channel marketing network layout: the company has more than 5000 first-level marketing outlets and more than 20000 secondary marketing outlets throughout the country, as well as marketing network layout in more than 100 countries and regions around the world; online through "Sun Rain" and "four Seasons Mu GE" self-operated online stores and JD.com Mall, Tmall Mall, SUNING, No.1 Shop, Wechat flagship stores to achieve complementary e-commerce channel layout. The omni-channel marketing network layout helps to improve the performance and efficiency of the company's supply chain and enhance the loyalty of dealers and consumers to the company's products.
Join hands with Danish Arcon-Sunmark to set up a joint venture company: on May 17, 2016, the company announced a joint venture with Danish solar giant Arcon-Sunmark (of which Sunrise Oriental subscribed 27.5 million yuan, accounting for 55% of the shares). The joint venture company will focus on providing systematic solutions for China's solar energy cross-seasonal heat storage heating and large-scale solar thermal projects. At the present stage, China's solar photothermal market is mainly focused on small system solutions. With the rapid development of solar regional central heating and industrial application market, the demand for large-scale solar heating in China is expected to increase significantly in the next few years. This cooperation is an important step for the company to implement the internationalization strategy in the new energy business, which can make full use of the technology and channel advantages of both sides in their respective fields and enrich the company's existing product structure.
It plans to acquire Shuaikang and enter the kitchen and electricity business. On December 5, 2016, the company announced that it planned to buy 75% of Shuaikang Electric for no more than 750 million yuan in cash. Shuaikang, as the leading brand of kitchen and sanitary appliances, is well known in the industry. Sunrise Oriental is based on solar light and heat and has a complete sales channel covering urban and rural markets throughout the country. This acquisition will quickly enhance the competitiveness of Sunrise Oriental in the field of kitchen and sanitary appliances, cooperate with their brand and channel advantages, and create a multi-category, omni-channel home appliance giant. Plan to participate in the establishment of Jiangsu SUNING Bank: on December 22, 2016, the company announced that it intends to contribute 944 million yuan in cash to subscribe for 23.6% of the shares of Jiangsu SUNING Bank. As the first officially approved private bank in Jiangsu Province, Jiangsu SUNING Bank is positioned as an Internet bank with online and offline integration and the whole industry chain integration. Investment in Jiangsu SUNING Bank will broaden the company's financing channels, and is also expected to provide inclusive financial services for Sunrise Oriental users, suppliers, partners and platform merchants, so as to enhance the company's market competitiveness in an all-round way.
Increase shareholdings to demonstrate shareholders' confidence: based on confidence in the future transformation and development of the company, from August 19, 2015 to March 15, 2016, Xu Xinjian, the actual controller of the company, increased the company's shares through the targeted asset management plan totaling 9.9696 million shares. accounting for 1.25% of the total share capital, the average holding price is 8.3 yuan per share, with a certain margin of safety.
Profit forecast and investment rating: as the leader in the solar water heater industry, the company is optimistic about the future layout of kitchen electricity, large-scale solar thermal systematic solutions and the financial industry. Regardless of the impact of acquisitions on performance thickening for the time being, it is estimated that the company's EPS for 2016-2018 will be 0.5, 0.6 and 0.74, respectively, with a "buy" rating.
Risk tips: the decline in sales of solar water heaters; the sharp rise in the price of raw materials; the progress of acquisitions is not as expected; the company layout of the financial industry is not as expected.