Core ideas:
Shanggong Shenbei is the first listed company in China's sewing machinery industry. The company is mainly engaged in the R & D, production and sales of industrial sewing equipment and household sewing machines. Aihua, Baifu, KSL, as well as domestic well-known brands: work, Butterfly.
It has made it into the top three in the global industry by acquiring expansion companies in the European market. In July 2005, the company acquired Dukop, a high-end German sewing machine brand. Aihua (DA for short). In March and July 2013, we successfully acquired Parkford, a century-old store in Germany, and KSL, a global leader in industrial sewing automation applications, to quickly acquire the world's top sewing technology, including 3D sewing technology. The company is currently in a global leading position in the field of automatic sewing equipment technology, and ranks among the top three in terms of production and marketing scale.
The profit level of the company continues to improve with the successful integration of overseas mergers and acquisitions. Through the integration of overseas and domestic resources and the increase of control over the regional market, the company's profitability continues to improve, and is now on a par with the two Japanese industry giants, and the operating profit margins of the three enterprises are all maintained at about 10%.
Accelerating the reform and development of the state-owned assets system in Pudong: in June 2015, the Pudong New area held a working conference on deepening state-owned assets reform and promoting enterprise development, and formally issued the "18 articles" on the reform of state-owned enterprises in Pudong. As one of the six major groups of Pudong SASAC, Shanggong Shenbei has accumulated some successful experience in business development and cross-border mergers and acquisitions, which provides a good foundation for the further reform of state-owned enterprises.
Profit forecast and investment advice: we expect the company to achieve operating income of 2014, 2230 and 2474 million yuan, respectively, and EPS of 0.325, 0.385 and 0.451 yuan respectively from 2015 to 2017 (note: the company earned about 100 million yuan through land acquisition and storage in 2014, resulting in a low profit growth in 2015. in fact, we expect the company's main business profit to grow rapidly in 2015). As a leading enterprise in the field of industrial sewing equipment, the company has successful experience in cross-border mergers and acquisitions and integration, and benefits from the reform of state-owned enterprises in Pudong. Combined with performance and valuation, we give the company a "buy" investment rating.
Risk hints: the expansion risk of M & An integration; the process of state-owned enterprise reform is uncertain.