Report summary:
Established in 2002, the company is a leading enterprise in the daily-use porcelain industry located in Chaozhou, Guangdong. It mainly produces daily-use porcelain, fine porcelain, and ceramic wine bottles. On May 25, the company announced the termination of the major asset restructuring of Chuangxian Science and Education and Jin Shangqi. It plans to use 230 million dollars in cash to acquire 51% of Daigo Brothers' shares and enter online education live streaming.
The company is a specialized, high-quality daily-use porcelain supplier located in the middle and high-end markets, and has jointly expanded production capacity through mergers and acquisitions and fund-raising. The company acquired 80% of Lianjun's shares to help expand the production capacity of the company's main ceramics business in the future. The company raised capital to build a production workshop for 6 million pieces of bone porcelain and a production workshop for 17 million pieces of daily-use porcelain to expand production capacity while increasing the added value of products to optimize the product structure.
Acquired Daigo Brothers and entered the blue ocean of live streaming of online education. The proposed acquisition of Daigo Brothers mainly provides online education live streaming technology services and interactive audio and video live streaming services for online education institutions. It owns products such as Dobeiyun, DobeiNet, and DuoBeiNet School Connect. The company has strong customer resources to provide live streaming technology services to education giants such as VIPKID and Global IELTS. The promised net profit for 17-20 is no less than 25 million yuan, 32.5 million yuan, 42.5 million yuan, and 52.25 million yuan.
M&A funds increase their holdings and lay out K12 education. The company cooperated with Shenzhen Qianhai United Chuangying Investment Management Co., Ltd. to establish the Guangdong Songfa Win-Win Industrial M&A Fund. The fund transferred 3.85% and 10.13% of Ming Shi Education's shares in December 16 and March 17, respectively. Currently, it holds a total of 13.98% of Ming Shi Education's shares. The participation of Ming Shi has established the direction of expansion that marks the company's new business growth point. As the second K12 extracurricular training institution in Guangzhou, Ming Shi is expected to cooperate closely with Daigo Brothers in online education in the future.
Company profit forecast. The company's 2017-2019 revenue is predicted to be 607/689/760 million yuan and net profit of 0.68/0.89/100 million yuan. The growth rates will reach 99.77%/39.05%/14.69% respectively. The company predicted EPS of 0.77/1.01/1.14 yuan respectively in 2017-2019, and the corresponding PE was 42/32/28 respectively, covering and giving the company a “recommended” rating for the first time.
Risk warning: Fundraising projects are progressing slowly; demand in the export market is weak; education business expansion falls short of expectations