Main points of investment
Matters: the non-public offering of shares was examined and approved by the issuance and examination Commission of the Securities Regulatory Commission on December 21, 2016. according to the company announcement, the issuance examination Committee of the China Securities Regulatory Commission examined the company's application for non-public offering of shares. According to the results of the meeting, the company's application for a non-public offering of shares was approved.
Peace viewpoint:
Grand strategy, good start: the company has established the strategic goal of "wisdom and health". "Wisdom Jinming" is intended to keep up with the 4.0 pace of industry, cater to the future direction of automation and intelligence of mechanical equipment, and appropriately enter into automation equipment, automatic control, robot research and other related fields. This non-public offering is mainly supported by the strategy of "Wisdom Jinming". It plans to issue no more than 50 million shares and raise no more than 506 million yuan. To build a special multi-functional film factory, agricultural ecological film intelligent equipment and five-end big data intelligent service platform and other three major projects to build Jinming intelligent ecosystem. It is estimated that when these three projects reach production, they will contribute a total net profit of more than 180 million per year. The non-public offering was examined and approved by the Development and Review Commission of the Securities Regulatory Commission, which is the first victory of the strategy of "wisdom and health", and laid the foundation for the future development of the company. In this issue, Ma Jiazhen, the son of the actual controller and general manager, subscribed for no less than 100 million yuan, showing great confidence in transformation and upgrading.
"Health Jinming", layout of rehabilitation robots: in the strategic direction of "Health Jinming", the company jointly established a rehabilitation robot research center with Tsinghua University in 2015 to lay out rehabilitation robots. it marks the company's official entry into the service robot and medical and health industry, which is of great significance for the company to realize industrial transformation and upgrading. At present, the research and development directions of the Joint Research Center are mainly: products for hospital and community rehabilitation, including upper limb nerve rehabilitation training robots for hemiplegic patients and exoskeleton walking training rehabilitation robots. Products for community and family rehabilitation include intelligent prosthetics, life-assisted technology products for the disabled and the elderly.
The global market for rehabilitation robots is expected to grow from $577 million in 2015 to $1.73 billion by 2020, with a compound growth rate of 24.51 per cent, according to Technavio, a British market research company.
As far as China is concerned, at present, there are more than 86 million disabled people, nearly 200 million elderly people, and the dependency ratio of the elderly population has reached 14.33%, exceeding the global average. There will be a huge demand for rehabilitation robots and other products in the future.
Downstream warming main industry improvement: in the main film machinery industry, we believe that if the downstream capacity renewal rate is stable, there should be a positive correlation between the film machinery demand and the increase of film production (demand) in the current year. Statistics show that the increase increased steadily year by year from 2011 to 2014, but declined sharply in 2015, which is consistent with the changing trend of the company's performance. Combined with China's film production from January to October 2016, we predict that the film production in 2016 will increase by about 850000 tons over 2015, which is about 64% higher than the same period last year. This trend is expected to continue in the future, and the company's main industry is picking up with the downstream industry. On the other hand, the company is also actively expanding the production and sales of high-end special multi-function membranes. Relying on the company's advanced machinery and equipment and intelligent management, it has been recognized by the market. After only one year of operation in 2015, it has achieved an operating income of about 52.46 million yuan and an operating profit of 9.16 million yuan, with considerable prospects.
Investment suggestion: the approval of this increase is an important step in the company's grand strategy. Be optimistic about the positive effect of the company's fixed increase projects on the future development of the company, and the broad development space of the company's great health strategy in the future. We believe that the macro-economy and downstream industries are gradually picking up, as well as the growing high-end film market will bring new opportunities for the company's development. It is estimated that the company's EPS in 2016, 2017 and 2018 will be 0.18,0.31 and 0.42 yuan respectively, with a price-to-earnings ratio of 100,59 and 43 times respectively, maintaining a "recommended" rating.
Risk tips: (1) macroeconomic recession, insufficient downstream demand; (2) the promotion of the big health strategy is not as expected; (3) the sales of high-end functional films are not as expected.
