Investment highlights Leading companies in the condiment industry. Since its establishment, the company has focused on R&D, production and sales of condiments. The product structure is rich, with more than 500 varieties in five categories, including compound seasoning powder, natural extract seasoning, spices, sauces, and flavored clear soups. Among them, compound seasoning powder contributes about 80% of the company's revenue and gross profit. In 2014, the company achieved revenue of 280 million yuan, +4% year on year; net profit of 56.57 million yuan, +7% year over year. The condiment industry is growing rapidly, and there is plenty of room for growth. The condiment industry is a typical “small product, big market”. Over the past 10 years, it has achieved rapid development, with a total output value of over 140 billion yuan and a total output of more than 10 million tons. The average growth rate of the industry has reached 15%, and the growth rate of emerging products is over 30%. 1. The compound seasoning market has huge potential: In the consumption structure of condiments in China, compound seasonings account for 20% and are growing rapidly, mainly due to the rapid development of the restaurant industry around the world and the revolution in the home kitchen. 2. Brand concentration in the industry is gradually increasing: China's condiment enterprises have many regionalization characteristics, are small in scale, and are not well known, making it difficult to achieve cross-regional development. With the gradual improvement of food safety and food standards, the condiment industry pattern is constantly changing, mergers and acquisitions are becoming more frequent, and the brands and influence of domestic enterprises are constantly being strengthened. 3. Innovative products continue to emerge. China's condiment industry develops a large number of new products every year, and new products such as compound seasonings, natural extract seasonings, and flavored clear soups are constantly emerging. Company advantages. 1. Compound seasoning powder faucet. The company has high popularity and brand influence in the field of compound seasoning powder. Among them, the market share of the rib flavor king series products ranks among the highest among similar products. In 2013, 22 comparable companies among the top 100 famous condiment brands in China had an annual output of 220,000 tons of compound seasoning, and the company produced 17,000 tons in 13 years. It has strong market competitiveness and high market share in East China and the central and southern regions. 2. Rich product categories. The company has a rich and complete product range, and currently sells more than 500 varieties. After years of development, the company has built a product system dominated by compound seasoning powders, which complement and coordinate the development of natural extracts, seasonings, spices, sauces, and flavored clear soups. Fund-raising projects: The company plans to issue no more than 30 million shares this time, and plans to use the raised capital of 480 million yuan to invest in 4 projects. The fund-raising project is carried out around the main business, focusing on expanding the company's production scale, improving the level of technology research and development, and improving the market network, and further strengthening the company's core competitiveness. Profit forecast and valuation analysis: Based on the total share capital of no more than 120 million shares after issuance, we expect the company's 2015-2017 EPS to be 0.69 yuan, 0.73 yuan, and 0.78 yuan, respectively. After comprehensive consideration, the company was given a price-earnings ratio of 25-30 times that of 2015, and a reasonable stock price range corresponding to the secondary market was 17.25-20.70 yuan. Risk warning: food safety risk; risk of fluctuating raw material prices; risk of implementing capital raising investment projects.