Domestic solid preparation granulation equipment leading enterprises, the product system is complete granulation link is the core link of solid preparation production, Canaan is one of the few domestic suppliers that can provide three kinds of granulation process equipment. In 14-15 years, the company's operating income was 184 million and 217 million respectively, an increase of 19.2% and 18.3% respectively over the same period last year. The company's equipment and technology can not only be used in the pharmaceutical field, but also can be widely used in health products, food and other major health industries.
The improvement of industry concentration is an inevitable trend, continuous mergers and acquisitions become bigger and stronger, China's pharmaceutical equipment enterprises are small and many, the concentration is low, and most of them are mainly single-category equipment sales. The centralized development trend of the downstream pharmaceutical industry will force the large-scale development of the pharmaceutical equipment manufacturing industry.
Canaan Technology is the only A-share listed company in the granulation equipment industry. the goal is to take the whole granulation line as the basis, extend to the front and rear of the pharmaceutical process through industrial integration, and gradually form the whole line supply capacity of solid preparations in the whole process. At present, the market capitalization of the company is less than half of that of other comparable listed companies, and its industry is rich in acquisition opportunities. in the future, the company can not only horizontally integrate and further improve the existing technology, but also vertically expand the large health industry and cultivate new profit growth points.
The interests of the management are closely related to the development of the company, and the stock price is firmly determined to stabilize the stock price. In the second half of 2016, programs such as shareholding increase, equity incentive and high price increase have been implemented one after another, closely combining the development of the company with the interests of the actual controller and management: 1) December 12 Company announcement Director and General Manager Fang Zheng (son of Mr. Fang Hengzhi, actual controller and chairman) and Fang ze (son of Vice Chairman Fang Zhiyi) plan to increase their holdings in the company by no more than 3 million shares (2.31% of the company's total share capital) in the next 12 months. 2) the company implements restricted equity incentive, involving a total of 95 core technical personnel and middle managers, sharing the long-term growth of the company; 3) in September, the company completed a 345 million non-public offering at a price of 34.47 yuan per share. The current stock price is slightly lower than the fixed price.
Optimistic about the development prospect of the company, the target price is 39.40 yuan.
The company is one of the few domestic suppliers that can provide three kinds of granulation process equipment and solutions, and it is the only target of A-share in the industry, and there is a great possibility of extension development in the future. The current market capitalization is only 4.4 billion, less than half that of similar companies, and there is huge room for market capitalization growth. Optimistic about the company's growth prospects, we predict that the company's EPS in 16-18 will be 0.45,0.54 and 0.66 yuan respectively, covering it for the first time and giving the "overweight" rating, with a target price of 39.40 yuan.
Risk Tips:
Downstream pharmaceutical industry policy risk; competition aggravates risk; extension development is less than expected risk