Main points of investment:
Deep ploughing of private garden enterprises in central China, "real estate + municipal" garden two-wheel drive. The company is mainly engaged in landscaping engineering design, construction, garden maintenance and nursery stock cultivation business, in which landscaping engineering business is the main source of income (the proportion of income reached 99.65% in 15 years). Cover municipal gardens and real estate landscape gardens and maintain balanced development, so as to have a certain anti-risk ability. The company has first-class urban landscaping enterprises, landscape engineering design special class B and other qualifications, since 2010, the project has won a total of 40 national, provincial and municipal awards, has accumulated a good commercial reputation and industry reputation in the industry. Chairman Wu Liang and his parents are the controlling shareholders and actual controllers of the company, holding a total of 61.67% of the shares in the company after the offering, and some management of the company also holds shares.
The garden industry has hundreds of billions of market demand, and the central and western regions have great potential. China's urbanization rate was 56.10% in 2015, and there is still room for improvement from the target of reaching 60% by 2020. The per capita park and green space area in cities is only 13.16 square meters, which is far lower than the best living environment standard of 60 square meters per capita determined by the United Nations. the continued promotion of new urbanization and the continuous increase of park green space per capita will strongly support the market demand of hundreds of billions of municipal gardens. Compared with the eastern region, the park green space in the central and western regions of China is obviously lacking in both area and number. in recent years, the economic growth of these regions is relatively good and the government has included the development of landscaping in the performance evaluation index. will effectively promote the rapid development of the garden industry in the central and western regions.
Revenue remains relatively stable, cross-regional expansion is worth looking forward to. From 2013 to 2015, the company's revenue was 285 million, 313 million and 354 million respectively, with year-on-year growth rates of 34.45%, 9.77% and 13.16%, respectively, and net profit of 41 million, 43 million and 48 million yuan, respectively, with year-on-year growth rates of 38.78%, 5.36% and 11.32%, respectively. revenue and performance maintained steady growth. In 2015, the company's revenue in Central China and East China accounted for 65% and 20% respectively, which is the main source of income. the company has established branches in the northwest, Beijing and Tianjin, and is expected to make a breakthrough in cross-regional operation in the future.
Raise funds for seedling construction and supplement working capital. The net fund raised by the company is 170 million yuan, which will be used for the construction of garden seedling production base (60 million yuan) and supplementary project working capital (110 million yuan). This listing improves the brand awareness of the company, improves the sources of funds, and helps to improve the competitiveness of landscape construction business; after the completion of the fund-raising project, the demand for seedling materials in business expansion will be further met, and the profit level will be improved.
The reasonable value range is 16.44-19.17 yuan. According to the calculation of this issue of 23.2768 million shares, the EPS in 16-17 years is expected to be 0.55 yuan and 0.63 yuan respectively. According to the rules of issuing new shares, the company's issue price is 9.06 yuan ((net financing 170 million yuan + issue fee 41 million yuan) / issue quantity), corresponding to 16-year PE of about 16.55 times. The company is a new stock with a small market capitalization. It gives the company a dynamic price-to-earnings ratio of 30-35 times in 16 years, and the corresponding reasonable price range is 16.44-19.17 yuan. After listing, the enhancement of the company's capital and brand appeal is not only conducive to cross-regional expansion of business, but also lay the foundation for the follow-up PPP project.
Risk hint. Municipal garden business decline risk, payback risk.