1. IPO purchase proposal:
The company is China's leading supplier of automotive plastic plating parts. Founded in 2002, the company has developed into a global supplier with offices in North America, Europe and Asia, serving a number of leading international first-tier suppliers and vehicle manufacturers. The company's main products are car interior plating parts of passenger vehicles, such as interior handles, door trim panels, transmission lever covers, steering wheel parts, console parts and dashboards, which are generally used in passenger vehicles of world-renowned luxury brands. In 2016, 30% of the company's revenue came from North America, 22.6% from Europe, 43.7% from China and 3.7% from other countries.
According to the Frost Sullivan report, the company is the second largest supplier and the largest exporter of automotive plastic plating parts in China by 2016 earnings.
From 2014 to 2016, the company recorded a compound annual growth rate of 23.7% for income and 28.3% for net profit.
From a financial point of view, in 2016, the company's operating income was 1.54 billion yuan, an increase of 28.0% over the same period last year, and the profit for the year was close to 300 million yuan, an increase of 34.5% over the same period last year. In terms of profitability, the company's gross profit margin in 2014-2016 was 38.5%, 37.6% and 41.1% respectively, and the net profit margin was 18.0%, 18.4% and 19.4% respectively, higher than the overall gross profit margin of the parts industry.
Taken together, the overall growth rate of the global automobile industry is relatively low in the future, while the growth rate of China will also slow down. If the company wants to maintain rapid growth, it needs to expand its market share. From the market pattern, China's automotive plastic plating parts market is relatively scattered, the largest market share of the enterprise market share is only 5.2%, the company's market share is 5.0%, this market pattern is not conducive to product price stability and cost control. In terms of profitability, the company has a high gross profit margin and net profit margin, and has an industry-leading level of quality products, which will be a bright spot if the data is sustainable; at the same time, the company also says that the future annual dividend payout rate will be 30% of after-tax profits. From a valuation point of view, the company's IPO price is 3.13-3.42 Hong Kong dollars, corresponding to a price-to-earnings ratio of 9.3-10.2 times 2016.
