Yujia is a manufacturer and supplier of hole and rock tools in Hong Kong. In terms of revenue, the share of Hong Kong in 2015 was 59.2%. In addition, beat machines, machines and rock equipment sold by external suppliers are sold. The self-designed and manufactured drilling tools are mainly divided into three categories: (1) drilling tools; (2) casing system: including guide screws and casing screws; and (3) other products such as ball screws and punches and newly developed products, rods, screws and bushings. Most of the revenue comes from direct sales of products to customers in Hong Kong and Macau, which began to sell products overseas in 2013. formal distribution arrangements were established with three sub-contractors in Finland, Japan and India in 2014, 2015 and 2016 respectively. The international demand for orifice rock tools in the new markets of India and Canada is increasing.
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The company is in charge of
(1) A collection of fully knowledgeable and complex geographies in Hong Kong (including hard rocks such as gardens and limestone, and other rocks such as limestone). In order to understand the needs of customers, design and provide customized products that meet their needs and play an important role. (2) experienced after-sales customers provide training to customers and provide advice on the selection of fitting parts for rechargeable products; (3) the production and delivery period of the collection is short. It is believed that this market is a key factor for the company's success in Hong Kong, where the business environment is fierce; and (4) the market leader of the hole and rock tools industry in Hong Kong has a loyal customer base.
Overview of the industry
Due to the increase of HK $99.9 million in 2010 to about HK $172.3 million in 2015, the Hong Kong perforated rock tool industry has a complex annual growth rate of 11.5%. This is due to the planning and implementation of major infrastructure projects such as the Hong Kong-Zhuhai-Macao University and the railway extension project from 2011 to 2013. According to Frost Sullivan's report, the market is expected to maintain growth during the test period, reaching about HK $278.5 in 2020, but due to delays in planning infrastructure projects, the annual growth rate has dropped slightly to 10.1%.
According to Frost Sullivan's report, the hole rock tool continues to rise, with the index rising from 100.0 in 2010 to 126.6 in 2015, with a complex annual growth rate of 4.8 per cent. During the testing period, it is estimated that the number of hole drilling tools will rise to 137.2 in 2020, with an annual growth rate of 1.6%, which is related to the increase in the volume of products. As the construction of major infrastructure projects has boosted the demand for related rock tools, the figure has increased from 106.7 to 119.5 from 2011 to 2012, which is even higher.
The Hong Kong hole and rock tool industry is led by five participants, with a market concentration of 94.3% and a revenue of HK $162.5 in 2015, ranging from HK $72 million to HK $102.1 million. In Hong Kong, the market share of the hole drilling tool industry was 59.2%. The market share of winner A, buyer B, buyer C and buyer D in 2015 were 15.5%, 8.9%, 6.5% and 4.2%, respectively.
Profit ability and duty number
Based on the historical records of the past three years, the employment income of the collection company decreased from 150.6 million yuan in 2014 to 141.7 million yuan in 2016, while the profit increased from 189 million yuan in 2014 to 270 million yuan in 2016, with a compound annual growth rate of 19.5 percent. For the three years ended March 31, 2014 and the three months ended June 30, 2016, the company's single largest customer accounted for 26.1%, 25.3%, 40.5% and 43.2% of the total revenue, and the five largest customers together accounted for 49.2%, 49.1%, 57.1% and 64.4% of the company's revenue.
Collection purpose
HK $627 million (based on HK $1.10 per share) from this collection is mainly for: about 57% for investment in new industries, about 5% for research and development activities, about 11% for overseas exhibitions and promotional activities, about 10% for new drilling equipment, about 5% for increasing manpower in Hong Kong, and about 4% for renting the new office of the Hong Kong headquarters. About 8% is used for general financial assistance.
Valuation
The industry of hole and rock tools in Hong Kong is low, with the five major players accounting for nearly 95% of the total market share, but the total revenue of the whole system is less than 100 million yuan, coupled with the fact that the first three months of this year also reflect the lack of annual income, the growth of the industry is limited, and the company's overseas division is not its strong point, in order to completely disperse the current income components that are too concentrated. The initial public offerings were sold at 100% public, of which 20% were listed shares. The investors gave a vote of confidence, and the IPO quota was higher than the industry average, so we suggested that investors should only be used as investment opportunities.
Negative factor
(1) the foundation engineering industry in Hong Kong, where most customers operate, is a wave, and the demand for the company's products may be affected by multi-market or commercial factors; (2) the surge in raw materials and rising labor costs in China may adversely affect the company's business; and (3) it is affected by supply, overall economic conditions and other factors beyond the control of the company. In view of the importance of alloy and carbonization to the company's hole structure, the company's cost framework is affected by the fluctuation of alloy and carbonization. (4) provide a number of raw materials and services needed to produce products according to third parties and meet the company's quality standards. (5) the production facilities of the collection may be poor, or may not be able to maintain efficiency or meet the production requirements of the company, which may have an adverse effect on the operating and operating conditions of the company.