It is proposed to acquire 68% equity of Huangshan Hualan Technology and distribute the upstream materials of nitrile gloves on December 25. The company announced that it signed a "Equity transfer Framework Agreement" with the equity transferor, Huangshan supply and Marketing Group Co., Ltd. Shaoxing. The company intends to acquire its 68% stake in Huangshan Hualan Technology Co., Ltd. from Huangshan supply and Marketing Group Co., Ltd., and the two sides have reached a preliminary intention agreement on equity transfer.
The target company is an enterprise specializing in the R & D, production and sales of powdered nitrile rubber and nitrile latex. The nitrile rubber latex is the main raw material of disposable nitrile gloves. From January to November 2020, the income was 72 million yuan, with a net profit of 9.91 million yuan; in 2019, the income was 69 million yuan, with a net profit of 3.4 million yuan.
The acquisition is an important measure for the company's medical disposable nitrile gloves industry chain to extend upstream. If the acquisition is completed, it will not only be more stable in raw material supply, but also solve the problem of R & D, production and sales of customized raw materials for high-end medical disposable nitrile medical gloves, enhance the grade and market competitiveness of the company's medical disposable nitrile gloves products, and improve the overall business scale and sustainable profitability.
The market prospect of disposable health protective gloves is broad. At present, the company is actively promoting the construction of Vietnam R & D, production and sales base based on disposable nitrile gloves.
At present, the consumption of disposable health protective gloves is mainly concentrated in the United States, Europe, Japan and other developed countries and regions, and the Asia-Pacific region has become the fastest growing area of disposable glove consumption. The United States consumes the largest number of disposable health protective gloves in the world, and imports of nitrile gloves increased from 31.1888 million cases to 51.6468 million cases between 2012 and 2017, according to import data published on the website of the US International Trade Commission. With the increasing improvement of people's living standards and the increasing awareness of self-protection, emerging market countries represented by China have stepped up the introduction of more relevant laws and regulations, stipulating that gloves must be used in more and more fields. this has opened up a broader market for the rapid popularization of disposable health protective gloves.
The company has built an "overseas base" in Vietnam to make full use of Vietnam's comparative advantages in geographical location and tariffs in international trade (Vietnam-made disposable nitrile gloves are sold without additional tariffs in the United States. Sales EU, ASEAN, Japan customs exemption, energy / manpower and other manufacturing costs comparative advantages) to enhance the company's endogenous growth momentum. By the end of June 2020, the first phase of production capacity construction of Kanglonda (Vietnam) is in full swing, and it is planned that 12 disposable nitrile (medical grade) gloves dual-mold production lines will be produced and sold in mid-2021.
Maintain earnings forecasts and give a "buy" rating. We estimate that the total revenue of the company in 2020 and 2022 will be 1.448 million yuan, 1.44 billion yuan, respectively, and the net profit will be 1.24 million yuan, 1.90 billion yuan, 2.14 million yuan, respectively, and the corresponding EPS will be 0.80 yuan, 1.22 billion yuan, and the corresponding Pamp E will be 42.00,27.37,24.30 times, respectively.
Risk hint: there is uncertainty in this acquisition, the loss of core executives, fierce market competition, upward fluctuations in raw material prices, and so on.