Main points of investment:
The 20-year net profit of homing increased by 26.86% compared with the same period last year. The company disclosed its annual report for 2020 that its operating income was 1.811 billion yuan, an increase of 18.74% over the same period last year; net profit of 315 million yuan, an increase of 26.86% over the same period last year; and non-net profit of 299 million yuan, an increase of 25.08% over the same period last year. It is proposed to pay a cash dividend of 5 yuan (including tax) to all shareholders for every 10 shares. In 2020, the company achieved a substantial increase in performance, producing 57.2353 million square meters of various conveyor belts, an increase of 28.82 percent over the same period last year, and selling 58.1093 million square meters of conveyor belts, an increase of 26.00 percent over the same period last year.
The continuous expansion of conveyor belt production capacity promotes the rapid development of the main industry. The "annual production line of 10 million square meters of steel wire core conveyor belt" invested and built by the company in the second half of 2018 began to be put into production in 2020, which alleviated the insufficient production capacity of steel wire core conveyor belt to a certain extent. While building its own capacity, the company is also looking for suitable M & A targets, and acquired an 80% stake in Huaneng Transmission in April 2020. After that, the company uses its own technology, management, sales and other advantages to improve its conveyor belt output, so that it can give full play to the annual production capacity of 5 million square meters of conveyor belt. At the same time, promote the construction of "energy-saving conveyor belt project with an annual output of 10 million square meters" to enhance the production capacity of the company's conveyor belt.
The pension industry has developed steadily. The subsidiary Tongxiang Heji Sanatorium Co., Ltd. aims to create high-end pension services, seek development in development, seek innovation in development, and constantly explore the way of combining medical care with health care by strengthening the construction of core posts and management team. Heji gradually established nursing homes based on nursing homes, and at the same time strengthened cooperation with external medical institutions. Heji Company has reached medical technical cooperation with Tongxiang first people's Hospital and Jiaxing Kangci Hospital and established a comprehensive partnership, which provides a strong guarantee for Heji Company to improve medical technology and rehabilitation nursing level. In the external expansion, at the end of 2020, Tongxiang Heji won the bid "Wutong Street Endowment Service Center Public Construction Private Project" to further expand the scale of the pension service market.
It is planned to issue no more than 550 million yuan of convertible bonds to promote the construction of automatic and intelligent production lines. In September 2020, the company plans to issue convertible bonds with a total amount of no more than 550 million yuan, mainly for the wholly-owned subsidiary Desheng belt "annual output of 15 million square meters of high-strength energy-saving and environmental protection conveyor belt project". The project construction period is 15 months. The completion of the project is expected to further expand the company's conveyor belt production capacity, achieve the goal of breaking through the annual production capacity of 100 million square meters at the end of the 14th five-year Plan, and further increase the market share of Shuangjian conveyor belt.
At the same time, the company will purchase a number of advanced equipment with a high degree of automation, promote the construction of automated and intelligent production lines, improve operational efficiency, improve product quality, and achieve cost reduction and efficiency.
Profit forecast. We estimate that the company's EPS in 2021-23 will be 0.88,1.05 and 1.27 yuan respectively, and we will give the company 13-15 times PE in 2021, with a corresponding reasonable value range of 11.44-13.20 yuan, maintaining a "better than the market" rating.
Risk hint. The product price falls, the downstream demand drops, the industry competition intensifies.