Main points of investment:
Duer Group is a century-old enterprise, which has a 60% market share in automobile painting system. Germany Dur Group is a supplier of machinery and complete sets of equipment with a history of more than 100 years. It operates in 28 countries around the world and has a 60% market share in the global painting system. Customers include Tesla, Inc., who entered the Chinese market in 1983. The Ecoclean acquired by the company is part of the premium assets of the Doyle Group and has a market share of nearly 50 per cent in North America and Asia. In 2014, 2015 and January-June 2016, the operating income was 1.425 billion yuan, 1.5 billion yuan and 640 million yuan respectively, and the EBIT was 82.95 million yuan, 94.88 million yuan and 30 million yuan respectively.
The industrial chain is reintegrated, and the growth of industrial cleaning business can be guaranteed. After the acquisition of Dur Group, the company is positioned as a global company, which will reintegrate Ecoclean's global factories to create economies of scale, and the net profit is expected to increase to about 50%. In the next 3 years, the company's main performance growth will be industrial cleaning equipment and services, especially in North America and China. Previously, more than 60% of Duer's cleaning business was cleaned in the automobile industry, and the company's performance growth in 17-18 will mainly come from cleaning equipment and services in the domestic automobile industry. There is a large domestic gap in the field of medical devices and electronics, which is also expected to perform. At present, Dur Group has partnered with many well-known automobile manufacturers and has launched operations in seven regions of the country, with a market share of about 10%. The market share in China is expected to be 15% and 20% respectively in 17-18, so the company's industrial cleaning and surface treatment business is expected to achieve 1.573 billion, 1.991 billion and 2.398 billion revenue in 16-18.
In 16 years, net profit reached 15.58 million, an increase of 43%, maintaining profit forecasts and buying ratings. In the past 16 years, the company mainly focused on cash flow and payback, realizing revenue of 180 million and net profit of 15.58 million, slightly exceeding market expectations. Listed companies have stripped the corridor-related debts to the controlling shareholders, Lanying Intelligence, a wholly-owned subsidiary, has been cancelled, and the cash flow situation has greatly improved. The company's performance has bottomed out in 16 years, and the company has been transformed into a global company. the net profit in 17-18 is expected to be 156 million yuan and 233 million yuan, EPS is 0.58 yuan / 0.86 yuan, corresponding to PE is 30X/21X. Analogy with German Industrial 4.0 related to the machinery sector companies, the 17-year average PE is 40X, while Ecoclean is the A-share industrial service scarce target, and has global sales and industrial service experience, domestic listed companies are optimistic about their expansion in the Chinese market after acquisition, conservative estimates give the industry average valuation, that is, the 17-year PE is 40X, corresponding to the market capitalization of 6.24 billion, the corresponding stock price is 23 yuan There is room for 30% of the current share price, maintain the earnings forecast and maintain the buy rating.
