Core ideas:
The panel furniture machinery and equipment industry benefits from the trend of customization and has a broad market prospect. The lower reaches of the panel furniture machinery and equipment industry is the furniture manufacturing industry. in the downstream consumption trend, the growth rate of artificial panels is significantly higher than that of solid woods. the demand for panel furniture equipment continues to rise, and the market prospect is broad. The demand of panel furniture equipment industry has continued to grow since the second half of 2016, the core reasons are: (1) under the trend of customized furniture, finished furniture enterprises have gradually transformed into customization, which has led to an increase in capital expenditure of downstream enterprises; (2) real estate sales in third-and fourth-tier cities have picked up, and the demand for equipment in the real estate post-cycle has accelerated.
Nanxing equipment is one of the leading enterprises of panel furniture machinery and equipment in China. Nanxing is equipped with deep ploughing board furniture machinery industry for many years, with a full range of products such as edge sealing machine, cutting board saw, multi-row drill and machining center, and is now moving towards an overall solution. The company has a sound operation, with an operating income of 540 million yuan in the first three quarters, an increase of 48% over the same period last year, and a net profit of 75.36 million yuan, an increase of 66.6% over the same period last year. The company forecasts an annual performance range of 8965-109.57 million yuan, an increase of 35-65% over the same period last year.
The company plans to acquire the only network and cut into the IDC field to create a new growth point. The company announced that it intends to acquire the only network of IDC enterprises and create new business growth points on the basis of the original business. The only network is a professional IDC service provider with a high-quality customer base and a complete supplier system. At present, the company is in the stage of rapid development, and the level of gross profit margin and net profit margin is gradually improving.
Investment advice: regardless of the unique network consolidation table for the time being, we predict that the company's operating income from 2017 to 2019 will be 695, 883 and 1056 million, respectively, and the EPS will be 0.94, 1.22 and 1.48 yuan per share, respectively, and the current price-to-earnings ratio is about 40x/31x/26x. The company is a leader in the panel furniture machinery industry, the proposed merger and acquisition of the only network to open up a new growth point, the future growth trend is good. For the first time, we gave the company a "buy" rating.
Risk tips: fluctuations in industry real estate sales affect downstream production expansion plans; demand in the custom furniture industry is lower than expected; and there is uncertainty in the acquisition of the only network.