I. Overview of events
We have recently conducted a survey of Xinyuan Technology and communicated with the management on various businesses of the company. the company's main products, internal mixer auxiliaries, have high market share and customer stickiness, and the pneumatic conveying system has grown rapidly. at the same time, the company has actively expanded its business line horizontally and vertically. We estimate that the EPS in 15-17 will be 0.38,0.46,0.56 yuan respectively, covering the investment rating of "cautious recommendation" for the first time. The reasonable valuation range is 42-45 yuan.
II. Analysis and judgment
The decline in net profit in the past 15 years is mainly due to the decline in gross profit margin and the increase in expense rate during the period.
The company's 15-year performance KuaiBao showed that the annual operating income was 214.27 million yuan, an increase of 11.45% over the same period last year. The net profit belonging to shareholders of listed companies was 25.23 million yuan, down 26.95% from the same period last year. The decline in net profit is mainly due to: 1) 90% of the company's downstream customers are concentrated in the tire and rubber industry, and the gross profit margin has declined due to the influence of downstream competition; 2) the company has increased its R & D investment in the past 15 years. The introduction of senior talents in R & D and business has increased the expense rate during the period.
The main business is sound, the market share of Shanghai Auxiliary equipment is high, and the customer stickiness is high.
The company's main products include upper auxiliary system, pneumatic conveying system and small material weighing system, accounting for 41.48%, 39.32% and 12.90% of revenue respectively. The upper auxiliary machine of the internal mixer is mainly used for the automatic control of main material proportioning and rubber mixing process, the small material proportioning weighing system is mainly used for auxiliary material proportioning, and the pneumatic conveying system is mainly used for conveying powder materials (such as carbon black). Pneumatic conveying system, upper auxiliary system and small material proportioning weighing system can be used independently or in combination.
The main products of the company have a large market share of auxiliary systems, which together with soft control shares account for most of the market share, and the company's market share is about 40%. And each set of internal mixer auxiliaries have to carry out personalized design in many aspects, such as different capacity, technical parameters, specification sets, other auxiliary equipment, control software configuration and so on, so the customer is sticky.
The company's overseas market share is about 20%, mainly from downstream customers to build factories overseas to drive exports, and the other part comes from overseas distributors. after the company's fund-raising projects reach production and capacity bottlenecks are opened, overseas markets are expected to make a further breakthrough.
Sufficient funds on hand, actively expand the business line horizontally and vertically
After listing, the company actively expands its business line horizontally and vertically. Vertical expansion to the three-dimensional warehouse through downstream customers, there are already on-hand orders; horizontal mergers and acquisitions related companies, the company acquired an environmental protection company in 15 years, the company mainly engaged in industrial exhaust gas treatment, rich technical reserves, 16 years is expected to contribute to performance. In addition, according to the quarterly report of 15, the company has a monetary capital of 156 million yuan, with sufficient funds on hand, and there is the possibility of epitaxial expansion.
Tire grading promotes the accelerated upgrading of rubber equipment, and the enterprises with the most cost-effective advantages in the future will benefit.
The European Parliament formally approved the draft regulation adopted in early October 2009, stipulating that starting from November 1, 2012, new tyres sold in the European Community market must be classified according to energy efficiency, wet road adhesion and noise performance. grades are marked from the best to the worst with the green "A" to the red "G" sign. Although there is no tire classification system in our country at present, tire classification is an inevitable trend. Tire classification system will force tire enterprises to improve their technical level and speed up the upgrading of machines. Enterprises with cost-effective advantages will benefit most in the future.
Third, profit forecast and investment suggestions
It is estimated that the EPS for 15-17 years will be 0.38,0.46,0.56 yuan respectively, the company's main business is sound, and the expansion of the industrial chain is actively advancing, we are optimistic about the long-term development of the company in the future, but in view of the current market systemic risk and the impact of "double reverse" on tire exports, it is the first time to cover the investment rating of "cautious recommendation", with a reasonable valuation range of 42-45 yuan.
IV. Catalyst and risk hint
Catalysts: epitaxial mergers and acquisitions, signing major contracts, etc.
Risk tips: domestic investment growth continues to decline, double opposition to the impact of tire industry exports, and so on.
