The company is in charge of

1) according to the report, the collection is the largest consumer can manufacturer in 2012, accounting for 30% of China's total output. As the leader of the can manufacturing industry, it enjoys success in manufacturing, product quality and customer base; (2) it can control capital expenditure at the same time through the use of second-hand production machines and upgrading of major machines; (3) it has the ability of R & D and mold manufacturing, and can produce a variety of products with specifications, tank shapes and shoulder shapes for customers. (4) long-term relationships have been established with major customers and major suppliers. As of 2012, the top five customers have maintained a relationship with the collection for 5 to 10 years, as well as with the largest supplier of films to the collection for more than 10 years.

Overview of the industry

Because of their high weight and anti-corrosion properties, cans are widely used in packaging materials, industrial and household products, personal care and chemical products and other consumer products. By volume, raw material bags account for more than 90% of the total number of units sold each year, most of which are cans. Industrial and household products (such as paints, air conditioners and sanitary products) or personal and cosmetic products (such as body deodorants, lotions and some medical products) are generally packaged in canned or non-refrigerated cans. According to the report, the global revenue from canister sales increased from US $24.3 billion in 2008 to US $29.6 billion in 2012, with a compound annual growth rate of 5.1%. Driven by the economic growth of the stock industry and the new market, it is estimated that the global can market will continue to grow from about US $31.7 billion to US $41.7 billion from 2013 to 2017, with a compound annual growth rate of 7.1%. In addition, between 2013 and 2017, the price test of the global commodity tank market will increase from about US $1.5 billion to US $2 billion, with a compound annual growth rate of 6.8%, mainly due to the increase in per capita consumer goods in the new market. and compared with other gold materials used in packaging, it has become more and more popular.

In recent years, it has been widely used in the Chinese gold package market. The product range includes canisters (such as chip cans), dough cans (such as canisters, canisters, cans of personal and chemical products, industrial and household products cans), food cans (such as milk powder cans and ordinary food cans), chemical cans and mixing cans (such as cans for stationery, toys and products). It is expected that the market share of waste cans in the overall cans manufacturing market will continue to increase in the coming years. According to the report, the output of waste cans grew at a compound annual growth rate of about 19.1% from 2008 to 2012, and is expected to grow at a compound annual growth rate of 12% from 2013 to 2017.

As far as the market structure is concerned, a small number of large manufacturers in China occupy the leading position in the market. In 2012, China's total output of tin cans was 6.1 million cans, and the five major enterprises producing such cans accounted for about 72.8% of China's total output. According to the report, there are about 100 manufacturers of cans in China, with less than 10 enterprises capable of producing more than 10 million cans.

Profit ability and duty number

Based on the historical records of the past three years, the revenue of the collection company has increased from HK $19.833 million in 2010 to HK $273.9 in 2012, with a compound annual growth rate of 17.5%. The annual growth rate has increased from HK $222 million in 2010 to HK $383 million in 2012, with a compound annual growth rate of 31.2%. It is believed that the profit rate of the collection in the previous period is stable, and it is believed that there is not much contact with the collection at present and that it is determined on a cost-plus-interest basis. As more than 60% of the products are sold directly to consumer brand manufacturers, and the average increase in sales over the past few years has not affected the sales volume, we believe that a certain cooperative relationship has been established between the collection and the major customers, and the expected profit margin will remain flat.

Collection purpose

HK $9 million (calculated at the median of HK $1.1 per share) from this collection will be used for the following purposes: up to 60% (or about HK $54 million) will be used to provide part of the capital for large production, including (I) HK $27 million for upgrading existing production lines, and further upgrading the product volume through more collection of machines, washing machines and repair machines. At the same time, increase the output and capacity to produce more types of products. And (ii) HK $2.7 million will be used to collect the production line of a brand new tank; up to 15% (or about HK $135 million) will be spent on the establishment of a new research and development laboratory, of which about HK $2 million will be spent on recruiting researchers and HK $115 million on essential machinery and equipment (including a three-seat measuring machine and a computer numerical control machine). Up to 20% (or about HK $18 million) will be used to reimburse some of the bank loans denominated in US dollars, and the next 5% (or about HK $45 million) will be used as general financing funds.

Valuation

The collection does not provide a profit forecast for the 2013 political year. According to the figures of the 2012 political year, the historical price-to-earnings ratio and historical price-to-earnings ratio are 10.4-12.5 and 1.7-1.8 times respectively. According to the previous records, there has been an increase in all products (including personal care products, medical products and cold medicine). We believe that against the background of the rise of China's manufacturing industry, the demand for consumer products continues to rise, and the sale of consumer products is linked to the sale of consumer products. As China accounts for 30% of the market, the market can benefit from it. Relative to the growth rate of the market, we think its valuation is reasonable. Investors are advised to make small notes on the stock market.

Negative factor

1) during the previous purchase period, the same chip processing accounted for 57.5%, 54.8% and 54.6% of the sales cost, respectively. The market is subject to fluctuations due to supply and demand conditions, while chip processing is heavily affected by fuel consumption. If the price or chip processing is high and the collection fails to pay such an increase to the customer, the profit rate of the collection may be adversely affected; (2) more than 90% of the films used in production during the period of purchase are processed by text, if any of the experience of the main supplier is found or if it is no longer a collection of processing products, it will have an adverse effect on business and business production. (3) as part of the future planning, a new production line will be collected at a cost of about HK $6.27 million. The estimated useful life of the new production line is long, but because of its high cost, its annual discount is higher than that of the second-hand production line, so the overall profit rate may initially decrease; (4) the cluster generally does not enter into a long-term sales contract with the customer. as a result, the price list sizes from customers vary greatly in different periods, depending on the number of orders in the future; (5) the volume of expensive cans is very important to customers. If there is any problem with the quantity of the products sold in the market, it may reduce the demand for the products. (6) during the purchase period, the affiliated companies of the Chinese government will be guaranteed to grant the status of "high-tech enterprises". Therefore, with the consent of the local accounting departments, the Chinese laws and regulations will enjoy 15% of the income rate of the preferential enterprises. If an event or cancellation period results in an increase in transaction expenses, it will have a negative impact on the profits and cash flow of the collection.