Incident description:
The company announced plans for a non-public stock offering: it plans to issue no more than 80 million shares to no more than 10 specific investors, including Guomao Holdings, the indirect controlling shareholder of the company, at an issue price of 9.72 yuan/share, to raise no more than 700 million yuan. It is intended to be used for new LED packaging projects in Anxi, LED application product expansion projects in Xiamen, and RFID product design and production line expansion projects.
The comments are as follows:
The company specializes in trade, real estate, and electronic information industries. While doing a good job in the main business, on the basis of steady development of the existing optoelectronic business and electronic tag business, we will stick to the “one in two wings” development strategy, focus on developing the LED and RFID business, and expand and strengthen the electronic information industry.
1) Anxi LED package construction project
The company's current packaging production capacity does not match the growing market capacity for LED application products. The implementation of this project will increase 6 production lines including PLCC type white light LED products, rapidly expand the company's packaging production capacity, and enhance the scale advantage of the company's packaging business. At the same time, the LED packaging and application business is an important part of the electronic information business segment, and will also be the company's main profit growth point in the future. It is estimated that after the project is delivered, it will achieve annual revenue of about 786 million yuan (after tax), accounting for more than double the company's revenue from information products in 2012.
2) Xiamen LED application product production expansion project
The project will be used to build 4 production lines for LED outdoor and indoor lighting products, which will complement the Anxi LED packaging production line built during the same period to enhance the company's profit growth potential in the electronic information industry. It is estimated that after delivery, the project will achieve annual sales revenue of 532 million yuan (after tax).
3) RFID product design and production line expansion project
The company is committed to expanding from the field of electronic tag product design and manufacturing to reading and writing instruments, system integration, etc. The total investment of the project is 152 million yuan, and a total of 13 RFID electronic tag production lines will be invested. It is estimated that after the project is delivered, it will achieve an annual income of 322 million yuan (after tax).
Profit forecast and investment rating: Without considering private distribution for the time being, we expect the company's earnings per share from 2013-2014 to be 0.33 yuan and 0.41 yuan respectively. Based on the latest closing price of 11.32 yuan, the corresponding dynamic price-earnings ratio is 34 times and 27 times, maintaining a “neutral” investment rating.
Risk warning: the risk of a slow recovery in international demand; the risk of increased real estate regulation; the risk that electronic information production expansion projects will not progress as expected, etc.