As the leader of container floor (15% market share in 2016), the company has mastered fast-growing wood technology + forest board integration, steadily increased market share through production expansion and acquisition of New Huachang wood industry, benefited from the warming of container industry, and environmental protection board benefited from consumption upgrading.
Sub-industry leader, main container floor and environmental protection board: the company is a national forestry industrialization key leading enterprise integrating seedling raising, afforestation and wood deep processing. Container floor (15% of the market in 2016) and environmental protection board account for more than 80% of the income, and the overall gross profit margin is maintained at about 40%. In the past five years, the company's income has grown at an average annual compound growth rate of nearly 24%, and its home net profit has reached an average annual compound growth rate of 32%.
The container industry has picked up, and environmental protection boards have benefited from the upgrading of consumption: the container industry has picked up. The cumulative year-on-year growth rate of container throughput in major ports from January to September 2017 was 9.1%, the highest in the same period since 2012, and the freight rate index has rebounded. The volume of China's container exports rebounded sharply, and the average price also rebounded quickly. China International Marine Containers, the leader of the industry, container sales grew by more than 100% in the first half of this year compared with the same period last year, and the gross profit margin rebounded sharply.
At present, in the floor industry, there are only 6 enterprises with an annual output of more than 100000 cubic meters, and the leader benefits the most. The concentration of wood-based panels is very low, and the industry of OSB (oriented structure particleboard) accounts for more than 50% of the mature market in Europe and America. There is a lot of room for the development of domestic OSB panels.
The company's fast-growing wood technology + forest board integration, with resources and cost advantages: the floor accounts for nearly 15% of the total container cost, and there is almost no compression space for other costs. Lightweight + low cost has become an industry trend. As a leading enterprise in the industry, the company still accounts for 80% of the cost of direct materials; mastering the fast-growing poplar technology of replacing tropical broad-leaved forests with sub-small fuelwood and rich forest resources to reduce raw material costs; develop intelligent equipment with Diefenbach in Germany to reduce labor costs; independently develop glue to improve performance and reduce the cost of auxiliary materials. The price of the company is stable, the bargaining power is strong, basically covering the four major domestic customers, the sales volume is growing rapidly. Through the expansion of production and the acquisition of New Huachang Wood (with a market share of about 7%), the market share has increased steadily, and with the commissioning of the new fully automatic container production line of 200,000 m3, it is expected to increase to 25% and 30%. Actively explore the field of wood structure, or will benefit from the promotion of prefabricated buildings.
Investment suggestion: as the leader of container floor (15% market share in 2016), the company steadily increases its market share through production expansion and acquisition of New Huachang wood industry, mastering fast-growing wood technology + forest board integration, in line with the development trend of container lightweight + low cost, benefiting from the warming of the container industry; COSB environmental protection board benefits from consumption upgrading. It is estimated that the EPS of 2017-2019 will be 0.47max 0.56 RMB.
Risk hint: the development of container industry and the application and promotion of OSB plate are uncertain, forestry disasters and so on.
