Summary of the report:
The company's main business is sound, and it is a leading enterprise in the daily glass industry. It is the largest manufacturer of mechanical glass goblets in China and one of the largest manufacturers in China's daily glass industry, mainly producing glass bottles and glassware. Over the years, the company's operating income is relatively stable, maintaining a steady growth trend.
The daily glass industry has room for development, and the industry concentration needs to be improved. With the increasing demand for environmental protection and the trend of consumption upgrading, the daily glass industry (mainly refers to daily glass products and glass packaging industry) will usher in an opportunity for development. However, compared with the more concentrated industry competition pattern in Europe and the United States, the concentration of daily glass industry in China is still low, there are a large number of small and medium-sized, low-end manufacturing enterprises, the industry concentration is expected to improve, and the middle and high-end products industry is expected to develop. As a leading company with strong profitability in the industry, the company is expected to benefit from industry integration.
The company's production base and marketing network layout is extensive, capacity expansion ushered in the development. Due to the existence of transportation radius of daily glass products, the company has established production bases in industrial concentrated areas throughout the country, and has accumulated many high-quality customer resources. At the same time, the company is also actively carrying out the layout of capacity expansion, and the production capacity of glass bottles and glassware is expected to grow by about 45% and 90% respectively in the next three years.
Transformation and upgrading is one of the highlights of the company's future. Combined with the development of similar companies in the industry and the company's own development positioning, we believe that the company has a certain expectation of transformation and upgrading, and there is a lot of room for imagination in the future.
It is estimated that from 2016 to 2018, the company's income growth rate is 18.27%, 29.56% and 9.22% respectively, and profit growth rate is 22.87%, 42.83% and 12.17% respectively, and the corresponding EPS is 0.56,0.86 and 0.95 yuan respectively, while the current share price corresponding to PE is 83,54 and 49 times respectively. For the first time, it covers the "buy" rating given to the company.
Risk hint: capacity expansion does not meet expectations; transformation and upgrading does not meet expectations
