Events:
The company announced the acquisition of 75% stake in Shuaikang Electric to complete the industrial and commercial change, Shuaikang officially became a subsidiary of the company.
Comments:
Acquiring Shuai Kang and marching into Kitchen Power, the company accelerates strategic transformation
The company bought the 75% stake in Shuaikang Electric held by Shuaikang Group for no more than 750 million yuan in cash. Shuaikang mainly engaged in tobacco machines, stoves and water heaters. The revenue in 2015 was 726 million yuan, and the adjusted net profit was 71 million yuan. The other side of the transaction promised that the deduction of non-net profit from 2016 to 2018 would not be less than RMB 0.85,1.02 and 122 million respectively, the insufficient part would be compensated by cash or equity, and 50% of the excess portion would be rewarded to the management team of the underlying company. The company expects that after the completion of the transaction, the two sides will optimize the industrial layout and form synergy in the aspects of channel, management, manufacturing and so on.
With the help of the parent company channel system, Shuaikang's third and fourth line expansion is worth looking forward to.
As one of the representative brands of Zhejiang high-end kitchen electricity, Shuaikang's performance is mediocre in recent years, but it still has good brand strength and product strength by virtue of its accumulation for many years. As a leader of solar water heaters, Sunrise East has perfect third and fourth line channels. At present, the company has more than 5000 first-class outlets and more than 20,000 second-level outlets, with the acquisition landing. In the future, Shuaikang will quickly promote the channel sinking with the help of the parent company's strong third-and fourth-line channel network, and the warming of third-and fourth-line real estate will also provide further support for Shuaikang's growth, at the same time, with the investment of capital resources in the Sunrise East, Shuaikang will also gradually make efforts in the first and second-tier market in the future, and we are optimistic about the integration prospects of Shuaikang after the completion of the acquisition.
Give a "recommended" rating
Based on the current low market concentration in the tobacco stove market, the cooperation between the two chefs in the field of electricity and the expected integration of channels and manufacturing, Shuaikang is expected to return to the growth track in the future. in addition, the company's original main solar water heaters are also expected to stabilize and pick up. Taking into account the 17-year Shuaikang table, it is estimated that the company's 16-and 17-year EPS will be 0.37,0.51 yuan, corresponding to the current PE27, 20 times, given the "recommended" rating.
Risk hint: new business expansion is weak, integration effect is lower than expected
