It has been in the business for a long time and has a large market share. Mengke Holdings is a leading cigarette wrapper manufacturer in Hubei Province, China. According to Ipsos, in 2015, in terms of cigarette wrappers sales, the company had the largest market share of 16.0% in Hubei Province; in terms of sales, it was also one of the top ten cigarette wrappers manufacturers in China; in terms of cigarette wrappers sales in China, the company had a 0.9% market share. The company has more than 10 years of experience in manufacturing cigarette wrappers in China.
The company has a stable customer base. The company's customers include the “Top 100 Printing Companies” selected at the 2016 National Printing Managers' Annual Meeting (such as Hubei Jinsanxia) and other leading cigarette packaging manufacturers in China, such as Beijing Limadun Pacific Packaging Co., Ltd., Wuhan Hongzhicai Packaging and Printing Co., Ltd., and Wuhan Hongjinlong Printing Co., Ltd. During the track record period, the company had a stable customer base, most of which were customers over three years.
The company industry has great potential for future market growth. Driven by an expected increase in cigarette production, the cigarette wrapper manufacturing industry in China and Hubei Province is expected to grow from 2016 to 2020. According to Ipsos, the estimated total sales value of China's cigarette wrapper manufacturing industry is expected to rise steadily from RMB 35,893.00 million in 2016 to RMB 36,145.50 million in 2020, with a compound annual growth rate of 0.2%. Meanwhile, the estimated total sales value of the industry in Hubei Province is expected to increase from RMB 1,951.8 million in 2016 to RMB 1,993.4 million in 2020, with a compound annual growth rate of 0.5%.
Careful subscription is recommended. The cigarette wrapper industry where the company is located is an industry that is just in demand and has great potential for future development; the company has an excellent brand image in the industry, and at the same time has a large market share and a stable customer base; in terms of valuation, the company's price-earnings ratio in 2015 was 10.1-14.2 times; as of the last actual practical date, the net market ratio was 2.5-2.8 times, which is reasonable compared to peers. Careful subscription is recommended.