Main points of investment:
Press 10 to 3 to raise 1.59 billion yuan. The company announced that it intends to raise 1.59 billion yuan according to the proportion of 10 shares to 3 shares on the basis of 358 million shares, and the placing price is the average price of 20 trading days before the issue date. The funds raised in the rights issue will be used to repay bank loans, pay the end of the chain of acquisition prices, and replenish liquidity. Of the funds raised, 810 million yuan will be used to repay bank loans, and the company will apply for merger and acquisition loans in the early stages of the acquisition project, and the funds raised will be replaced after the funds are in place to ease the pressure on financial expenses; 220 million yuan will be used to pay 65% of the final payment of the acquisition price chain; and 560 million yuan will be used to supplement working capital.
The full subscription of the controlling shareholders shows confidence. The controlling shareholders fully subscribe for the allocated shares, demonstrating their confidence in the development of the company. Tianjin Huize Feng, the company's controlling shareholder, holds a 25% stake in the listed company and promises to subscribe for all the allotable shares in cash, showing the strong confidence of the controlling shareholder in the development of the company's zipper plus cross-border dual main business.
Price chain acquisition completed, the establishment of zipper + cross-border dual main business. The company announced on September 21 that it had completed the transfer procedure for 65% of the equity in the chain of acquisition prices. after the funds for this rights issue were in place, it would make a comprehensive effort to cross the border two main businesses, according to the price chain in 2017-19, the performance commitment of RMB 160 million in 1.0cm, and a cumulative profit of not less than 510 million yuan in three years, helping Xunxing to take a solid step in breaking through the bottleneck of the traditional manufacturing industry and expanding new industries.
Cross-border business will be fully supported by financial support. Price chain is engaged in cross-border export B2C business, mainly engaged in electronics, home, health products and other products, with its own brand, focusing on product development. We believe that in the stage of increasing competition in the industry, the company emphasizes the long-term competitiveness of the strategy of streamlining SKU, improving product research and development capabilities and constantly cultivating brand reputation. After this financing, cross-border business in the back-end supply chain integration and upgrading, front-end marketing promotion and other aspects of full financial support, we expect the scale of the business is expected to accelerate expansion.
Profit forecast and valuation. We estimate that the EPS in 2017-19 is 0.42, 0.65, 0.89 respectively. As the cross-border business is expected to maintain high growth in the future, we give a price-to-earnings ratio of 28X in 2018, with a "buy" rating corresponding to the target price of 18.20 yuan.
Risk hint. The rise in the price of raw materials has led to a rise in costs, unable to transfer costs downstream, and cross-border business expansion has fallen short of expectations.