Main points of investment
The driving force of the company's growth: the recovery of the main business, the strategic layout of new tobacco and industrial marijuana.
Actively close mergers and acquisitions to expand the advantages of the company's industrial chain. After listing, the company uses the advantage of funds to integrate within the industry, improve the industrial layout, and achieve the goal of covering major domestic high-end cigarette enterprises.
The company increases its R & D investment, and the continuous input and output of new projects drive the company's performance growth. At present, the new projects carried out by the company include new three-dimensional self-formed environmental protection packaging construction projects and microstructure optical packaging materials construction projects. The continuous introduction of new products with high-tech content has become a strong driving force for the sustainable growth of the company's business.
Actively open up overseas customers and increase the source of sales revenue. The company continues to open up overseas customers and tap customer demand, and the proportion of overseas operating income is steadily increasing. At present, the company has established cooperative relations with Amcor Group, British American Tobacco PLC and A Lianyou tobacco companies.
The layout of new tobacco, resource integration, ready to start. In 2013, the company established a joint venture with Dongfeng shares in Shanghai Free Trade Zone to establish Shanghai Luxin Electronic Technology Company, which is engaged in the R & D and manufacture of e-cigarettes. In November 2018, the company's subsidiary Hong Kong Green Harvest purchased a 100% stake in Cambodian cigarette manufacturer SINO-JK in order to strengthen the R & D, manufacture and sales of new non-burning tobacco heating bombs.
Obtain the industrial marijuana planting license and distribute the industrial marijuana business. On January 16, 2019, Yunnan Luxin Biopharmaceutical Co., Ltd., a wholly-owned subsidiary of Shunhao Co., Ltd., received the Yunnan Industrial Hemp planting license issued by Zhanyi Branch of Qujing Public Security Bureau and obtained the planting qualification of industrial hemp Yunma No. 7. I also received a reply from the Zhanyi Branch of Qujing Public Security Bureau on the company's application for hemp mosaic processing. Shanghai Luxin Electronic Technology Co., Ltd., a subsidiary of the company, signed a "Cooperation Agreement" with Yunnan Hansu Biotechnology Co., Ltd., and Hanma Investment Group Co., Ltd., all parties cooperate to explore the market opportunities of industrial hemp mosaic leaves extraction basic materials in electronic biological health products (including industrial hemp mosaic base materials derived from hot non-combustible solids, liquid electronic atomization appliances and oral tablets, etc.). Shanghai Luxin and Yunnan Hansu plan to jointly invest in setting up a company, which will promote Shunhao to carry out business activities in industrial marijuana related fields in the future.
Profit forecast: it is estimated that from 2018 to 2020, the company's operating income will be RMB 20.55max 22.68 / 2.519 billion, and its net profit will be RMB 1.06 billion, respectively, with an increase of-5.79%, 11.22% and 18.45% over the same period last year, with a corresponding EPS of RMB 0.14, 0.16 and 0.18 respectively.
Risk hint: the risk of the flagging development of the cigarette industry downstream of the company, the risk that the new business development represented by the new tobacco and industrial marijuana is not up to expectations, and the risk of policy regulation.