The Shanghai Collection provides foundation engineering services in Hong Kong and Macau. The company has been undertaking foundation works in Hong Kong for more than 46 years since 1970.
The scope of foundation works undertaken by the company mainly includes percussion construction (such as punch-in I-beam, rock-socketed I-beam, preview cast-in force, micro-type, pipe and center post), ELS engineering, cap construction, floor formation and ancillary services (such as load test and construction machine rental service). The bazaar mainly provides foundation engineering services to private institutions (mostly building-related projects) and public institutions (including building and infrastructure-related projects).
We recommend investing in speculative stocks.
The company is in charge of
(1) the solid status and good track record of the foundation engineering industry in Hong Kong, it has more than 46 years of experience in undertaking foundation engineering in Hong Kong; (2) the management team has rich industry knowledge and project experience in the foundation engineering industry in Hong Kong; and (3) the group has established a diversified customer base in both private and public institutions. The company's private sector clients include major property developers, construction companies and other business entities, while the collective public agency customers include various government departments and a railway operator in Hong Kong. (4) on July 31, 2016, the company has a full range of machinery and equipment at a total cost of about HK $153.7, including crawler cranes, hoists, aircrafts, aircrafts, launchers, excavators and preview equipment. the company can carry out projects of different sizes and complexity.
Overview of the industry
The income of the foundation engineering contracting industry in Hong Kong increased sharply from HK $13 billion in 2011 to HK $226 billion in 2015, with a compound annual growth rate of 14.8%. As foundation works (such as construction works) will not be carried out until after the commencement of construction projects, the growth of the foundation engineering industry reflects the growth of the construction industry as a whole. The increasing income of the foundation works industry from 2011 to 2015 is mainly driven by public sector agencies (including the Ten Infrastructure projects and the Public Housing Development Plan). Due to the expected increase in demand for residential and commercial buildings and public infrastructure projects, the income of foundation works contractors is expected to increase at a complex annual growth rate of about 6.4% from HK $24.5 billion to HK $31.4 billion from 2016 to 2020.
With the construction of residential and commercial buildings and public infrastructure facilities and projects to be launched soon, it is expected that the total output value of the foundation engineering industry in Hong Kong will increase. According to the 2015 Policy address, it is expected that private sector institutions will provide about 14600 units a year between 2015 and 2019, compared with about 11400 units in each of the past five years. In the 2016 Policy address, another housing policy was introduced to continue to increase the supply of residential housing. The Housing Committee and the Hong Kong Housing Society will supply about 97100 public housing units, of which about 76700 will be public rental units and about 20400 will be financial assistance units. Therefore, we will continue to invest in the property development forecast to increase housing supply and promote the total revenue of construction and foundation works in Hong Kong in the coming years.
The estimated total output value of the foundation engineering industry in Macao will rise from 13 billion patacas in 2015 to about 172 billion patacas in 2020.
The annual growth rate is 5.8%. The slight decline in the total output value of the foundation engineering industry in Macao from 2015 to 2016 is due to the recent economic downturn, which affects the general construction projects of the private sector and the foundation works.
The total output value of the foundation engineering industry in Macao is expected to grow at a complex annual growth rate of about 8.7% from 2016 to 2020, due to a rebound in the construction industry due to the future development of the Macao market. According to the reports of the major companies in the Macau industry, such as Fanghe Expo and Melco, the construction of hotels, hotels and other facilities will be implemented from 2016 to 2020 and will support the general structure of Macau's engineering departments. from then on, support the foundation works in Macao.
Profit ability and duty number
Based on the historical records of the past three years, the revenue of the collection has increased from HK $464.1 million in 2014 to HK $464.3 million in 2016, of which there was a substantial decline in annual revenue of HK $143.1 million in 2015. During the concession period, the company completed 24 foundation projects with a total contract fund of about HK $1126, including 19 Hong Kong projects and five Macao projects. At present, the fair has 18 projects (including contracts under construction and contracts granted but not yet started), with a total contract grant of about HK $623.7 million, of which about HK $212.7 million has been confirmed during the previous contract period. for the year ended March 31, 2017, the expected revenue was about HK $404.5 million.
Collection purpose
HK $88.11 million (based on HK $0.9 per share in sales) of the proceeds of this collection will be used for the following purposes: about 70.4% will be used for hoists, pumps, crane and alarm machines required for the company's foundation projects. About 20.4% is used to obtain a performance guarantee from the bank or the authorized insurance company in respect of the contracts that have been entered into and ╱ or those invested in the year ended March 31, 2019 in favour of the customer as the percentage of the agreement. About 7.6% will be used to recruit a project manager and a project manager to enhance the company's project management capabilities and increase the internal training of staff to improve their skills and abilities; about 1.6% will be used as general funding for collection.
Valuation
According to the calculation of IPO HK$0.8 to 1.00, the historical price-to-earnings ratio of Shanghai Stock Exchange is 13.2x to 16.5x, and the P / E ratio is about 2.53x to 2.86x.
If it is based on the foundation engineering company Flood and Jichi, which launched its IPO in September.
(1591.HK) by comparison, the company then uses a historical price-to-earnings ratio of about 18.8 to 21.9 times and a price-to-market ratio of about 3.43 to 3.59 times. However, the previous session of the Shanghai stock market involved the sale of shares, which accounted for as much as 30% of the total number of shares of the Development Bank. The above activities did not give people a good impression, coupled with the recent decline in the market, under the weakening of the investment atmosphere, it is expected to affect the desire to buy new shares, so we suggest that investors should only make speculative bets on this stock.
Negative factor
(1) the company's revenue depends on the success of non-routine foundation projects, but there is no guarantee that customers will provide new services to the bazaar or that the company will obtain new customers; (2) in order to maintain the relevant integrity and integrity, the market must comply with the restrictions and conditions imposed by a number of government departments. For example, contractors in the works Section of the Development Bureau must comply with the established supervision system to ensure that the contractors meet the operational capacity, professional, management and safety standards; (3) to estimate the cost of the investment project and delay the completion of the project if the cost involved and ╱ or any project are not accurately estimated, it may lead to cost overruns or even problems. (4) the flow of funds of the company may be adversely affected by letters to customers and if customers are unable to make timely or full payment. (5) delays in the start of public projects due to political differences related to public projects, political obstruction and opposition to or legal action orders, and large-scale demonstrations or occupation of activities, may adversely affect the company's financial and business operations.