Key points of investment:
The first coverage gave a “prudent increase in holdings” rating, with a target price of 21.4 yuan. Nanling Minbang is a regional leader in China's civilian explosive industry. Its products cover the field of civilian explosive equipment such as industrial explosives and industrial detonators. In recent years, the company has adopted an integrated business strategy to maintain steady development. With the comprehensive deepening of the state-owned enterprise reform policy and the acceleration of Xintiandi Group's reform, asset injection can be expected. The company's net profit for 16-18 is estimated to be 184/192/194 million yuan, and the corresponding EPS is 0.50/0.52/0.52 yuan respectively. A target price of 21.4 yuan was given (corresponding to 43 times PE in 2016), and a “prudent increase in holdings” rating.
Minbaku is a regional leader, and integrated operations have maintained steady development. The Nanling Civilian Bomb is the regional leader in China's civilian explosive industry. Its products cover the fields of industrial explosives and industrial detonators. Faced with the impact of declining demand in the civilian explosion industry in recent years, the company has taken an active strategy to respond: ① integrated operation of civil explosives: extending to system integration services and bombing services; ② refined management: reducing procurement costs and increasing the proportion of product sales in the province; ③ civil explosion industry integration: according to company announcements, the company actively sought high-quality targets. We believe that the focus of the company's future populist bombing business may lie in the extension of the industrial chain and industrial integration.
State-owned enterprise reform policies have been comprehensively deepened, and reform of the Xintiandi Group can be expected. According to the State Council's opinion on state-owned enterprise reform work and the Hunan provincial government work report, 2016 is expected to be a year of comprehensive deepening of state-owned enterprise reform in Hunan Province. We judge that the group's subsidiary companies are expected to speed up the securitization process, and asset injection can be expected. According to Xintiandi Group's plan, during the “13th Five-Year Plan” period, the group will establish a combination of industry and finance, including an investment holding group for Minbom, Hyundai Security, the health industry, and financial capital operation services. Among them, the security service industry will take advantage of the Group's capital operation advantages and strive to become the first listed company to be promoted by domestic armed forces in the special industry.
Catalyst: Industrial chain integration in the civilian explosion industry.
Core risk: The progress of state-owned enterprise reform is lower than expected.
