Events:
The company issued a reminder notice for the resumption of trading and signed a major contract.
Comments:
1, sign a major contract, container floor sales will increase significantly: the company and Shanghai OneWorld Logistics equipment Co., Ltd. reached an agreement on the supply of COSB container floor in the first half of 2018, the supply quantity is 85000 cubic meters of container floor, the average price is 4800 yuan / cubic meter, the total amount is about 410 million yuan, the sales to the customer has increased significantly compared with the same period last year. The customer is the company's long-term business partner and the only container manufacturing enterprise under COSCO Shipping Group; headquartered in Shanghai, there are modern container manufacturing plants in Guangzhou, Lianyungang and Jinzhou. In 2016, the company sold 167000 cubic meters of container floor, with an average price of about 3750 yuan per cubic meter. The signing of this agreement will help to promote the application of COSB composite container floor and promote the transformation and upgrading of industry products, which will greatly increase the company's sales, at the same time, the average price will be higher, and the revenue will increase significantly.
2. Industry leader, mainly engaged in container floor and environmental protection board: the company is a key national forestry industrialization 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%.
3. It has the advantages of resources and cost, fast-growing wood technology + forest board integration, benefiting from the warming of the container industry: the company has mastered the fast-growing poplar technology of replacing tropical broad-leaved forest with sub-small fuelwood, as well as rich forest resources to reduce raw material costs; in line with the lightweight + low-cost industry trend of container manufacturing. The cumulative growth rate of container throughput of major ports from January to November 2017 was 8.7%, the highest in the same period since 2012, and the freight rate index rebounded. Since 2017, the volume of China's container exports has rebounded sharply, and the average price has rebounded relatively quickly. China International Marine Containers, the industry leader, container sales grew by more than 100% in the first half of 2017 compared with the same period last year, and the gross profit margin rebounded sharply. Through the expansion of production and the acquisition of New Huachang Wood, the company's market share is expected to increase to 25%, 30%, as a container floor leader, the most benefit.
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. Give a "highly recommended-A" rating.
Risk hint: the development of container industry and the application and promotion of OSB plate are uncertain, forestry disasters and so on.