Key points of investment:
The company's annual report was released, and net profit increased 8.54% year-on-year in 2015. In 2015, the company achieved revenue of 1,976 million yuan, an increase of 25.18% over the previous year; net profit attributable to shareholders of the parent company was 280 million yuan, an increase of 8.54% over the same period last year (consolidated financial data for 2014 adjusted retrospectively). At the same time, the company pays a cash dividend of 1 yuan for every 10 shares.
The company's forecast for the first quarter of 2016 was announced, and net profit for the first quarter is expected to increase by more than 100% year-on-year.
Overseas acquisitions are the next big thing. The company issued an asset acquisition announcement on March 19. It intends to purchase 100% of the shares of the Australian Security Group and two permanent properties and Thai Security through cash payments. This transaction forms a related transaction. Based on the exchange rate of the evaluation benchmark date, the total transaction volume of the two acquisition projects was 978 million yuan. Of these, Thailand Security made performance promises. The net profit of 2016, 2017, and 2018 was not less than 1.39, 182, and 221 million yuan, and the cumulative net profit from 2016 to 2018 was not less than 541 million yuan.
The 2015 results benefited from endogenous growth and the results of extended mergers and acquisitions strategies.
Overseas mergers and acquisitions will take the next step, and the Belt and Road will have a global layout. As a leading enterprise in the security industry, China Security Consumer has expanded into overseas security markets in recent years. The acquisition of the Australian Security Group is the first step for China Security Consumer to enter developed countries. The business strategy, which is in line with the company's “Belt and Road” global layout, is conducive to further expanding overseas security operation service business. Furthermore, Australian security is already quite mature. By replicating the advanced service operation model of the Australian Security Group's “Security+” (which also provides extended facility management services including facility cleaning, facility maintenance, etc.) of the Australian Security Group, the company will rapidly improve its security operation and service capabilities.
The security operation service space is broad. The focus of the industrial chain of China's security industry is gradually shifting from the field of product manufacturing to the field of system integration and operation services. It is also clearly stated in the “12th Five-Year Plan for the Development of China's Security Industry” that by the end of the “12th Five-Year Plan” period (2015), security operations and various service industries will account for more than 20%. Compared to the current situation where security operation services in China only account for 10% of the security market, the size of the security operation service market in Europe and the US is 10 times that of the security product market, which means that there is still a lot of market space for security operation services.
The company's overseas layout continues, and the domestic security operation service market is also entering a stage of rapid development, maintaining its “buy” rating. We predict that the company's net profit for 2016/2017/2018 will be RMB 9.15/1,421/2116 million yuan respectively, the corresponding EPS will be 0.71/1.11/1.65 yuan respectively, and the target price will be 37.6 yuan (53X in '16, the current profit forecast does not take into account possible future industrial layout).
Uncertainties. The uncertainty of industrial integration, and the feasibility of business model exploration.
