Investment logic
With the integration of European sewing brands, performance improvement has entered a period of growth: Europe turned losses into profits in 2014 and began to gradually enter a period of healthy development. In Europe, the company acquired three important sewing equipment companies, Duke Aihua, Baifu and KSL, and integrated them on the European platform. Duke Pu Aihua and Baifu have turned from competitors to partners, and their superior products complement each other and enhance their global competitive advantage in the middle and high-end market. KSL has the world's leading special sewing technology, especially in robot sewing workstations, which is a sharp tool for the company to develop sewing equipment in automotive interior decoration and aerospace fields.
Pay attention to the demand of new application areas and the adjustment and upgrading of product structure: 1, the application field of sewing machinery to automobile interior decoration, aerospace, composite materials and other non-clothing fields; 2, sewing machinery automation upgrade; 3, household sewing machine market development. The company pays close attention to the development opportunities in the aerospace field, and the demand in domestic aerospace, military and other fields will gradually increase, and the company may enter this field in the future.
The first echelon of the reform of Shanghai Pudong State-owned assets Supervision and Administration Commission: the key time node of the progress of state-owned enterprise reform with the gradual clarity of the national top-level design and the holding of the national reform conference in Shanghai Pudong New area, implementation is expected to accelerate. Shanggong Shenbei is one of the six state-owned enterprise groups in the first echelon of reform under the jurisdiction of Shanghai Pudong SASAC, and 19% of it is directly owned by Shanghai Pudong SASAC. The motivation of the enterprise itself comes from the introduction of financial investors + incentives in place.
Profit forecast
The company obtained about 100 million yuan of non-operating income through land acquisition and storage in 2014, resulting in a low profit growth rate in 2015 and a rapid growth rate of the company's main profit. We forecast that the company's main business income from 2015 to 2017 will be 2.234 billion yuan, 2.614 billion yuan and 2.898 billion yuan respectively, an increase of 13.3%, 17.0% and 10.9% respectively over the same period last year, and the net profit of 217 million yuan, 269 million yuan and 319 million yuan, up 9.74%, 24.26% and 18.45% respectively over the same period last year. The EPS is 0.40 and 0.49, respectively, and the corresponding PE is as much as that in 34-28-23.
Investment suggestion
We believe that the company's business integration in Europe has achieved good results and its performance has entered a healthy growth period. the company has mastered the automation technology of high-end sewing equipment and has a leading advantage in domestic demand adjustment and product automation update. and directly benefit from the Pudong state-owned enterprise reform, combined with the current stock price valuation level, we give the company a "buy" rating for the first time, with a six-month target price of 20 yuan.
Risk
The risk of further integration of Shanggong's European business; the risk of declining demand in the downstream clothing industry; and the risk of business expansion in new areas such as aerospace.