It has a long business history and a considerable market share. The company has a business history of nearly 20 years, is experienced and has established a solid reputation in the building decoration industry in China. The company has many of the highest qualifications and licenses in the building decoration industry, and the company was rated as “China's Top 100 Building Decoration Industry Enterprises” for 11 consecutive years from 2004 to 2014. According to Frost & Sullivan's report, on December 31, 2015, there were about 24,000 participants in China's building decoration industry. In terms of sales revenue in China in 2015, the company ranked 18th in the building decoration industry with a market share of 0.07%, ranking sixth in the medical building decoration industry, with a market share of 0.09%. In terms of revenue in 2015, the medical building decoration industry accounted for 6.1% of the total building decoration market in China.
Performance growth and profitability are stable. For each of the three years ending December 31, 2015, the company's total revenue was approximately RMB 1,484.6 million, RMB 1,479.7 million and RMB 1,659.7 million respectively, with a compound annual growth rate of 5.7%; net profit attributable to equity holders of the company during the year was approximately RMB 61.7 million, RMB 79.6 million and RMB 100.7 million respectively, with a compound annual growth rate of 27.7%; as of 2015 and June 2016 For the six months ending on the 30th, the company's total revenue was approximately RMB 705.2 million and RMB 746.2 million respectively, with an annual growth rate of 5.8%. Net profit attributable to the company's equity holders during the period was approximately RMB 43.6 million and RMB 44.3 million respectively, with an annual growth rate of 1.6%.
The competitive advantage of the industry is obvious, and the sales network is broad. The company has the following competitive advantages: (i) it is one of the top 20 building decoration service providers in China, with high brand recognition; (ii) the company has multiple highest-level qualifications and licenses and provides customers with comprehensive building decoration services; (iii) the company has a huge business network in China; (iv) the company has strong R&D capabilities; and (v) the company has an experienced professional management team and project manager team in the industry. By setting up branches and offices in 18 provinces, autonomous regions and municipalities directly under the Central Government, the company has established an extensive business network covering South China, East China, Southwest China, Northwest China, North China, Central and Northeast China.
Careful subscription is recommended. In terms of valuation, the company's price-earnings ratio in 2015 was 9.6-11.9 times; as of the last practical date, the net price-earnings ratio was 1.3-1.5 times, which is reasonable compared to peers. Careful subscription is recommended.