Analysis of the basic situation of debt conversion:
The credit test conversion bond issuance scale is 545 million yuan, and the debt and entity rating is AA-/AA; the conversion price is 36.89 yuan, with a share conversion value of 101.08 yuan as of November 7, 2023; the issuance period is 6 years. The arithmetic average value of each year's coupon is 1.28 yuan, and the maturity compensation interest rate is 15%, which is a high level of newly issued convertible bonds. Based on the 6.33% discount rate of the 6-year AA-grade Chinese bond corporate bond maturity on November 7, 2023, the debt base is 79.63 yuan, and the value of the pure bond is lower. All other game terms are market-based clauses. If all shares are converted, the dilution pressure on the total share capital is 12.98%, and the dilution pressure on the tradable share capital is 28.03%, which puts a lot of pressure on the dilution of existing share capital.
Analysis of the winning rate:
As of November 7, 2023, the top three shareholders of the company, Lu Jiechong, Lu Baozhong, and Gao Lei each held 17.64%, 14.06%, and 12.37% of the total share capital. The total shareholding ratio of the top ten shareholders was 62.10%. Based on the current market revenue and environment, the first-day placement scale is expected to be around 70%. The remaining amount of new bonds purchased online is 164 million yuan. Since the maximum subscription limit for a single account is 1 million yuan. Assuming that the number of online subscription accounts is between 950-10.5 million, the winning rate is expected to be around 0.0016%-0.0017%.
Subscription value analysis:
The company's industry is testing services (Shenwan Level 3). From a valuation perspective, as of the close of November 7, 2023, the company's PE (TTM) was 27 times higher. It was at a moderate level among 10 companies in the same industry with similar income, with a market capitalization of 4.243 billion yuan, which is above average. As of November 7, 2023, the company's stock has risen 12.34% since this year. The industry (Shenwan Level 1) index fell 20.76% during the same period, and Wandequan A fell 1.58%. Since listing, the annualized fluctuation rate has been 43.36%, and the stock price is highly flexible. The company's current share pledge ratio is 1.98%, and there is basically no equity pledge risk.
Credit test debt conversion is relatively small, debt base protection is average, and parity is higher than face value. After thorough and careful consideration, we give credit test bonds a 30% premium on the first day of listing. The estimated listing price is around 131 yuan. It is recommended to actively participate in the purchase of new bonds.
Analysis of the company's business situation:
In the first three quarters of 2023, the company achieved revenue of 511 million yuan, a year-on-year increase of 27.34%, operating costs of 210 million yuan, a year-on-year increase of 23.16%, and an increase in profitability; net profit to mother was 133 million yuan, an increase of 40.12% over the previous year, and the profit situation was good.
Competitive advantage analysis:
Enterprise positioning: comprehensive inspection and testing agency. 1) Brand awareness and credibility advantages. The company has been recognized by many international certification bodies, has accumulated high-quality customer resources, and established cooperative relationships with well-known enterprises. 2) R&D innovation and technology accumulation advantages. The company continues to develop leading testing technology and methods. 3) Excellent management team and professional talent advantage. The company has established a scientific and reasonable promotion system and platform. 4) Fast market response ability and efficient testing service advantages. The company's testing platform can respond to customer needs in a timely manner. 5) National major regional layout and service network advantages. The company has set up 8 key laboratory locations and a basic nationwide marketing network system. 6) Provide “one-stop” certification services in the field of electromagnetic compatibility and product safety testing.
Risk warning: 1) The risk of issuing convertible bonds and not being able to convert shares at maturity; 2) the risk of diluting earnings per share and return on net assets; 3) the risk of changes in credit ratings; 4) the risk of fluctuations in the original stock.