The company is in charge of
(1) the company is a trusted mechanical engineering company in Hong Kong. It has been successful and reliable; (2) the company has established long-term relationships with major customers, suppliers and sub-contractors for 10 years, 20 years and 12 years respectively; and (3) Mr. Yu, the director, chairman and executive director of the company, has been involved in mechanical engineering services in Hong Kong for more than 29 years. The Chief Executive Officer and Executive Director has also been rich in mechanical engineering services for more than 20 years. (4) the company has put in place a set of strict quality assurance measures, including supervision and audit of engineering performance and materials.
Overview of the industry
According to the Ipsos report, the total output value of Hong Kong's mechanical engineering services industry increased from about HK $177 billion to about HK $32 billion from 2011 to 2015, with a compound annual growth rate of 16.0%. The growth during the period was largely due to the strong real estate market, as the total output value of private sector engineering services increased from HK $8.5 billion to HK $128 billion, with a compound annual growth rate of 20.3%. However, Hong Kong's real estate market has declined in recent years because China's economic downturn has affected housing affordability and consumer confidence. Most importantly, since 2013, the Hong Kong Government has adopted a number of health measures (such as the levy of home stamps, external stamps and double stamps) to establish high-end property standards.
In the future, Hong Kong's economic growth will be subdued by weak retail, travel and trade demand, which will exert a boost on the overall growth of the construction industry.
In addition, infrastructure projects are nearing their peak or completion before and after 2016.
In view of this, it is expected that the total output value of Hong Kong's mechanical engineering services industry will slow from about HK $35 billion in 2016 to about HK $41.9 billion in 2020, with a compound annual growth rate of 4.6%. Nevertheless, as the Hong Kong Government regulates the property industry and further provides residential housing, housing construction in the private and public sectors will benefit from further housing policies and land supply. In addition, there are about 20095 private buildings in Hong Kong for more than 30 years, and the number has further reached more than 27000 in the past 10 years. As a result, it is expected that building protection and renovation works will be carried out and the demand for mechanical engineering services will be increased.
Profit ability and duty number
Based on the previous records of the past three years, the revenue of the collection has decreased from HK $330.8 million in 2013 / 14 to HK $190.2 million in 2015, while profit has decreased from HK $250 million in 2013 to HK $236 million in 2015. The company's turnover ratio increased from 1.4 times on March 31, 2014 to about 1.6 times on March 31, 2015. The increase is mainly due to lower other payables and accruals due to lower warranty payable and contractual costs as at 31 March 2015, as well as lower profit before deduction for the year ended 31 March 2015. The company's liquidity ratio further increased to about 1.9 times as at 31 March 2016, mainly due to an increase in bank results and payments on 31 March 2016, partly offset by a decrease in easy collection items. The company's turnover ratio remained stable at 1.9 times as at June 30, 2016.
Collection purpose
HK $649 million (at HK $1.125 per share in sales) from this collection will be used for the following purposes: about 44.0% will be used to develop and expand the public sector's mechanical engineering services and to enhance the competitiveness of the private sector; about 43.0% will be used to provide a performance guarantee to enable the collection to purchase more projects with high contract value; about 3% will be used to install the ERP system. About 10% is used for general financial assistance.
Valuation
According to the IPO HK$1.00 to 1.25, the historical price-to-earnings ratio of the stock market is about 16.9 to 21.2 times, and the price-to-price ratio is about 2.56 to 2.84 times.
The company is determined on the basis of the current IPO area, and its valuation is clear that the average valuation of the industry is high. In addition, 20% of the shares sold are related to the sale of shares, and the campaign will also give investors a vote of confidence, so we can only suggest that the stock be speculative and focus on short-term operation.
Negative factor
(1) the past income and interest rate of the collection may not reflect the future income and interest rate of the collection, especially the revenue of the collection comes from non-routine mechanical engineering services, and if the collection is unable to continue to fetch a list of new items, the revenue may be lower than expected. (2) the gross profit margin of the company depends on the investment case of each project, which is based on the estimated cost and the time involved. If the actual cost is significantly deviated due to miscalculation or other unexpected circumstances, the operating and operating expenses of the company will be adversely affected; (3) the company will rely heavily on sub-contractors to complete the company's projects. Any delay or defect will adversely affect the operating and operating performance of the company; (4) the company relies heavily on the quality and supply of suppliers; and (5) the company needs to obtain various licenses, licenses and certificates to conduct business in Hong Kong. Once such licenses, licenses and certificates expire, revoke, revoke, downgrade and / or not renew, they will adversely affect the company's liability and liability.