The company has long focused on the field of landscaping business. The company is mainly engaged in the construction of landscaping projects in the field of municipal public gardens and real estate landscaping, accounting for 99.7% of Prida in 2015, of which real estate garden revenue accounted for 44.7% and municipal garden revenue accounted for 55.3%. The actual controls of the company are Wu Liang, Zhao Xiaomin and Wu Shixiong, who directly own 82.23% of the company.
The landscaping industry is an "eternal sunrise industry", and the central and western regions are important investment areas. With the advancement of urbanization and the improvement of people's awareness of ecological and environmental protection, the landscaping industry is in a rising cycle. The market capacity is expected to be about 350 billion yuan in 2018; the investment in municipal public gardens will grow at a compound annual growth rate of 20.90% in 2002-2014, and the market capacity is expected to be about 500 billion yuan in 2018, with huge market space. Classified by region, the investment in landscaping in the central and western regions is less than that in the eastern region. In 2014, the greening coverage rates in the central and western areas were 39.06% and 37.56% respectively, compared with 41.48% in the eastern region. It can be seen that there is still more room for growth in the central and western regions in the future.
The company has a good business reputation, and cooperation with excellent real estate developers, balanced business development, with national competitive strength. As an enterprise in the landscaping industry, the company has ploughed deeply in the field for more than ten years, completed a number of landscaping projects and won 40 national, provincial and municipal high-quality engineering awards. In terms of real estate landscape business, the company has established long-term cooperative relations with Vanke, Poly, Shimao and China Construction, laying the foundation for the company to stabilize the market business in Central and East China and enter the national landscaping market. In addition, the company actively develops the municipal public garden business, trains the professional garden regiment team, and constructs the technical advantage in the economical garden. In the future, the company will fully benefit from the development of the industry, expand market development in the central and western regions, and increase business profits.
Future growth points: 1) economical garden is an important development direction, and the company has a broad space in the future. The company is an outstanding promoter and practitioner in this field. At present, there are 16 new patented technologies and 25 non-patented technology achievements, which have technological competitive advantages. 2) consolidate the market share of central and eastern China and increase the national market share. Because the investment in the central and western regions is less than that in the eastern regions, the green coverage rate of the built areas in the western regions is only 37.56%. The company will benefit greatly in the future by focusing on developing the business in the northwest and other areas.
Combined with the situation of the industry and the company, it is estimated that the EPS of the company in 16 and 17 years will be 0.55,0.66 yuan, while the average PE of the company in 16 years is 40.11 times compared with Tiehan Ecology, Liberal Arts Garden and Pubang Garden. We think that the reasonable valuation of the company in 16 years is between 30 and 40 times, and the reasonable share price range after listing is 16.5-22.0 yuan.
Risk tips: macroeconomic decline exceeding expectations; policy risk; payback risk.