Summary:
According to the terms of Bestaq's prospectus, the company's IPO is expected to raise 5496.26 million yuan, and the total amount of issuance, underwriting and other expenses is 78.8859 million yuan. The total amount raised by the two is 6286.1119 million yuan. In the company's audited 2019 annual report, net profit attributable to the owner of the parent company after deducting non-recurring profit and loss was 139.757 million yuan. It plans to issue 26.67 million shares. The diluted EPS was 1.31 yuan. The price per share calculated based on the total amount raised was 23.57 yuan, and the corresponding PE was 17.96 times.
The static PE corresponding to the China Securities Industry (C39) in the past month was 48.72 times. The issuance price of the corresponding PE calculated based on the amount of capital raised was lower than that of the industry's PE. There is no need to consider delaying the issuance. It is estimated that the IPO price for Basdak is 23.57 yuan.
Bestac has established long-term partnerships with TTI, Wireless and Ring. The global market shares of smart controllers for power tools and consumer power tools are 5.98% and 8.78% respectively.
TTI ranked second in global market share. Among them, the power tool business had a global share of over 50%. In 2017-2019, TTI sales accounted for 79.3%, 82.5%, and 58.9% respectively. The business has strong stability and sustainability, and the risk of being replaced is low. In the field of intelligent controllers, companies are gradually developing customers such as TCGP and Techtronic to reduce their dependence on TTI; partner customers in the field of smart products include Amazon's subsidiaries Wireless and Ring, where Wireless is a pioneer in the field of smart lighting worldwide. The company is expected to benefit from increased industry concentration and continued increase in customer demand in the future.
Based on the disclosure of the prospectus and the above analysis, combined with the company's product types, we selected Hutai, Topbon, Lanco Smart, Hejing Technology, Yingqu Technology, and Megmet as comparable companies. The average value of the predicted price-earnings ratio of comparable companies in 2019 was 33.61 times, and the static price-earnings ratio of the company's industry “C39 computer, communications and other electronic equipment manufacturing” in the past month (as of February 21, 2020) was 48.72 times. In the 2019 annual report, the net profit PE of the mother returned to the mother was 17.96 times. Compared with industry PE and comparable companies, Bestduck's valuation was reasonable.
Risk warning: (1) The pace of IPO issuance has been delayed due to force majeure; (2) demand in downstream power tools, smart homes, automotive motors and other fields has slowed, and competition in the superimposed smart controller market has intensified.
