Report guide
Through offline promotional activities and advertising investment to improve the sales of lubricating oil products, enhance the brand awareness of core products, as the fund-raising projects reach production, the company's lubricating oil production and market share continue to increase.
Main points of investment
Point 1 the company is a small and medium-sized company in the large lubricating oil industry, and its market share has gradually increased in recent years. The apparent consumption of lubricating oil in China in 2016 is more than 6 million tons, while the company's 16-year lubricating oil sales volume is only 52000 tons. In the past five years, the compound growth rate of the company's profits has been 21%, and the performance has continued to grow steadily. The market share has reached nearly 1% in 16 years, up from less than 0.5% in 12 years. Although the growth rate is fast, the market share is still low. With the flexible sales, management and incentive mechanism of private enterprises, the brand awareness of the superimposed company's products has increased, and the company's market share is expected to further increase in the future.
Point 2 deep ploughing offline dealer channels, product positioning in high-end companies currently have more than 600 dealers, full production and sales. Products for standard Mobil, Shell and Castrol and other foreign brands, the company's dealers can get higher gross profit margin, can enjoy better service. The company and dealers employ auto repair experts to provide regular technical guidance and training to repair workers through product distribution fairs all over the country, involving the latest technologies such as engine country 4 / country 5 standards. The company has more than 600 Compton and Lu Bang brand products and more than 100 commonly used products. According to the market demand and American API system standards, lubricating oil is invested every year to evolve the formula and improve the process. The company is located in the middle and high end, and is highly recognized by end users by virtue of service and product quality.
Point 3 raise investment projects reach production, double production capacity, effectively solve the problem of capacity bottleneck capacity is a deficiency of the company's development, 16 years the company's lubricating oil capacity utilization rate of more than 140%, due to capacity constraints, the company's products are in short supply in the peak sales season. The new Huangdao plant has a designed lubricating oil production capacity of 80,000 tons, which is twice the capacity of Laoshan production area, and there is room for further improvement through technical transformation and other methods. In addition, Huangdao has a three-dimensional warehouse, which can be used to produce more storage in the off-season in case the product is in short supply during the peak season. In addition, Huangdao is also equipped with "20,000 tons of antifreeze and 1000 tons of brake oil production capacity." after the new Huangdao plant is put into production, antifreeze sales will also increase.
Profit forecast and valuation
It is estimated that the company's revenue in 2017-2019 is 10.41,12.67 and 1.574 billion yuan, an increase of 26.9%, 21.7% and 24.2% year-on-year. The 2017-2019 return profit is 1.56,2.04 and 253 million yuan, compared with 38% and 23.9% of the same period last year. The corresponding EPS is 0.78,1.02 and 1.27 yuan per share, and the PE is 32, 24 and 19 times. Coverage for the first time, giving a "overweight" rating.
Risk hint: the price of raw materials is rising, and the sales of fund-raising and production are not up to expectations.
