Main points of the report
Event description Bang Jie Co., Ltd. (002634) issued an announcement on May 12, 2016, wholly-owned subsidiary Bangjie Medical Investment Management Co., Ltd. funded the establishment of its wholly-owned subsidiary Shanghai Bangjie Medical Technology Co., Ltd., with a registered capital of 150 million yuan, to provide medical technology development, consulting and other services On June 3, the wholly-owned grandson company Bang Jie Medical Technology invested in Hong Kong to set up its wholly-owned subsidiary Bang Jie International Investment Holdings Co., Ltd., with a registered capital of US $11 million, mainly engaged in medical technology and related business to be carried out by Bang Jie Group.
Event comment
Seamless clothing business has entered a mature period, and the company's revenue growth is weak. Since entering the Chinese market in 2000, the company's main seamless clothing industry has entered a mature period after 16 years of rapid development. In recent years, with the slowdown of global economic growth and the intensification of competition in the industry, the growth capacity of seamless clothing industry has declined. The company achieved operating revenue of 374 million and 330 million respectively in 2014 and 2015, down 0.02% and 11.75% respectively from the same period last year.
Mergers and acquisitions into the medical and health industry, the establishment of Sun Company to promote industrial fund projects. On the basis of consolidating the traditional seamless clothing business, the company actively explores the transformation and development. Taking into account the growth rate of residents' medical and health expenditure, the increase in medical and health demand in the context of aging, and the relevant policy support of the state in the medical industry, the company set up a medical and health industry fund with its own capital of 50 million yuan and Shangxin Capital in 2015, which is intended to invest in the large health field. Through the joint medical and health industry professional, resource-rich equity investment institutions jointly set up M & A funds, can effectively reduce the risk. In order to better promote the operation of the medical and health industry fund project, the company established Sun Company Shanghai Bangjie Medical Technology Co., Ltd., which mainly provides medical technology development, consulting and other services. the rich manpower, technology and preferential policies of the free trade zone in Shanghai provide important support for the company to expand related business in the medical and health field and accelerate strategic transformation.
To set up a wholly-owned great grandson company in Hong Kong to build an overseas development platform and promote international development. In order to make full use of Hong Kong's geographical advantages and build an overseas development platform, the company has set up a wholly-owned great grandson company in Hong Kong, which is conducive to the company's overseas investment and overseas trade under the strategic planning of the company's transformation to the medical and health field. enhance the company's popularity, improve the company's competitiveness, and promote the company's international development.
Based on the development of the main business, firm strategic transformation, and continue to pay attention to the layout of the company in the field of health. On the basis of insisting on seeking development based on the main industry and consolidating the leading position of the industry, the company invests in the field of medical and health industry through mergers and acquisitions, setting up subsidiaries and so on; through active exploration and practice, let the company take a firm step in the strategic transformation of the enterprise. At present, the company already has the favorable conditions for strategic transformation and upgrading, and the results of the transformation can be expected with the help of the resources of various professional institutions and the determination of strategic transformation in the future. At present, the M & An investment fund project is in orderly progress, and the great grandson company is still in planning. We maintain the previous estimate that the EPS for 2016-2017 will be 0.36 yuan and 0.43 yuan respectively, corresponding to the current valuation of 30 times and 25 times, maintaining a "neutral" rating.
Risk tips: M & A fund investment risk, subsidiary company, Sun Company management risk and so on.