Main points of investment

AIA ceiling is the first listed company specializing in R & D, production and sales of integrated ceiling, and it is a leading enterprise in integrated ceiling industry. The total share capital of the company is 87.632 million shares, of which 23.9% are tradable shares and 76.1% are tradable restricted shares. From 2013 to 2016, the company's performance scale continued to expand, and the performance growth rate slowed down.

2017Q1 has a strong performance, with operating income of 89.07 million yuan, an increase of 34.3% over the same period last year, and net profit of 17.3 million yuan, an increase of 48.7%. The company's annual performance in 2017 is expected to exceed expectations.

The integrated ceiling is about to usher in the period of industry integration. The main contents are as follows: (1) the integrated ceiling is a new and subdivided industry in the household building materials industry. Compared with the traditional ceiling, the integrated ceiling further meets the upgrading of customers' needs for beauty, function and environmental protection, and is in line with the national industrial construction industry policy. (2) the integrated ceiling industry is about to enter the period of industry integration, and the leader will benefit. From the perspective of the industry life cycle, the integrated ceiling is still in a period of rapid growth, with a market size of about 20 billion yuan in 2017, with an average annual growth rate of about 20%. From the perspective of the competitive pattern, the concentration of the integrated ceiling industry is very low, and the market concentration of first-tier and second-tier brands is less than 20%. The fluctuation of raw material price is good for the integrated ceiling leading company as a whole. (3) while stabilizing the kitchen and bathroom space, the application space should be expanded with the living room as the core. From the industry point of view, the integrated ceiling has entered a multi-application scene, intelligent stage, high potential energy living room space to bedroom, restaurant and other space expansion is a major trend of the industry, leading enterprises have a stronger expansion ability.

Strong R & D and B-end development have created the leading position of AIA integrated ceiling. (1) the strong R & D strength is the core competitiveness of the company as the integrated ceiling leader, the company has developed the integrated ceiling of living room, bedroom, dining room and other application space, integrated metope products are under research and development, "new application space + new products" stimulate the demand side, and the brand effect is further strengthened. (2) cooperate with Evergrande to open the B-end market. The expansion of the C-end market is based on the expansion of offline space. At present, the C-end customers are mainly concentrated in East China and North China. The signing of a cooperation framework agreement with Evergrande to promote the development of B-end customers has three main effects: first, the B-end customer gross margin will pull down the company's overall gross profit margin. Second, B-end customers are conducive to improving the company's brand image and market share. Third, we can make full use of the market platform set up by B-end customers to improve the company's market share in Northeast, Southwest, Northwest and other regions.

Profit forecast and investment advice. The company's EPS from 2017 to 2019 is expected to be 1.8yuan, 2.41yuan and 3.3yuan respectively, and the return net profit will maintain a compound growth rate of 32% in the next three years. Considering the company's leading position in the integrated ceiling industry, R & D strength and the opening of the B-end market, the company is given a 40-fold valuation in 2017 and a "buy" rating corresponding to the target price of 72 yuan for the first time.

Risk hints: the risk of raw material price fluctuations; the risk that the promotion of new products is not as expected; the risk of real estate regulation causing a decline in C-side demand; and the risk of B-end users unilaterally terminating the contract.