Events:
Liu Zongli, the company's controlling shareholder and chairman, as well as Xue Jianping and Yang Yuanzhi, vice chairmen of the board of supervisors, and Wang Naiqiang, chairman of the board of supervisors, signed a "share transfer agreement" with Ningbo Yipu Fortis Asset Management Center (limited partnership) on November 7, 2016. 3610 million shares of the company were transferred to Futong, accounting for 9.78% of the company's total share capital, with a transfer price of 20 yuan per share and a total transfer price of 722 million yuan.
After the completion of the transfer, the proportion of shares held by Chairman Liu Zongli dropped from 26.76% to 20.07%, which is still the actual controller of the company.
Comments:
As one of the main production enterprises of functional sugar, the company is in the forefront of market share. The main business has been operating steadily in recent years, contributing more than 40 million of net profit in the first three quarters of 2016. At the same time, new production capacity has been put into production one after another, and profitability has been further enhanced.
The company cooperates with Zhejiang Zhongjikang to jointly develop special medical and food products and actively lay out the big health industry. Zhongjikang, as a leader in the industry, already has three products on sale, sound sales channels and stable customer resources, and the cooperation between them will help to expand a broader market space.
The company firmly adheres to the strategic layout of "Great Health". The introduction of strategic investors will help to optimize the company's ownership structure and comprehensively enhance the company's sustainable operating ability. After the termination of the acquisition, the company has maintained an open attitude towards the capital platform, and does not rule out the effective integration of high-quality assets in line with the company's development strategy in the future, so as to promote the company to become bigger and stronger.
The target price is 24 yuan, raised to the "buy" rating:
We predict that the EPS of the company in 2016 and 2018 will be 0.18,0.21 and 0.26 yuan respectively. Considering the small market value of the company at present, the steady development of the main industry of functional sugar, and the steady progress of the healthy layout of special medicine and food in the future, the profit space is expected to open quickly. After the introduction of the war investment, the company's ownership structure was further optimized, and there were expectations of the integration of high-quality assets. We raised the target price to 24 yuan and upgraded the rating to "buy".
Risk Tips:
The production progress of the fund-raising project is not as expected; the progress of the special medical and food business has slowed down.