The future growth rate of the fireworks industry will be 15% Mur20%, and the industry integration is expected to be strong.
The fireworks industry as a whole has a large market capacity, with a national output value of more than 20 billion yuan. in the future, with the improvement of people's living standards and the increase of festivals and performing arts activities, it will increase at an annual rate of 15% and 20%. And the industry is very scattered, the industry concentration is very low, with the increasingly stringent requirements of safety and environmental protection in the future, the industry will be strongly expected to integrate. Enterprises that fail to reach a certain scale or fail to meet the safety and environmental protection standards will no longer issue production licenses.
The acquisition of Dongxin Company to improve the company's production and management capacity.
After acquiring the larger Dongxin Company in China, the company has become the leader in the domestic fireworks industry. At present, Dongxin Company will still operate independently. Because of its strong production capacity, the company mainly relies on Dongxin Company to improve its production capacity and learn production, operation and management capabilities, and rely on Dongxin's sales channels.
The company's Beijing market success model will be copied to other markets.
At present, the company has obtained fireworks operation licenses in eight cities or provinces, among which it has achieved great success in the Beijing market, with a market share of more than 50% in Beijing and will be copied to other cities or provinces in the future. we expect that the company will obtain a total of about 20 business licenses in the next three years, but due to different market conditions, it will take time for the company to achieve benefits.
The introduction of new varieties of fireworks is the basis for the survival of fireworks companies.
The launch of new varieties of fireworks every year is the basis for the survival of fireworks companies. although the company strives to cultivate market awareness and brand awareness, we believe that the variety influence of fireworks market is greater than brand influence. the company will still rely on the company's strong ability to develop new varieties in opening up the domestic market in the future.
The company will maintain a high proportion of administrative expenses.
In view of the fact that the company still has a long way to go in opening up the domestic market, we judge that the company's management expenses will maintain a high proportion in the future, and the company's net interest rate will remain low.
The fireworks display project of the Guangzhou Asian Games is being invited for tender.
At present, the Guangzhou Asian Games fireworks display project is being invited for tender, and the company actively participates in the bidding. We judge that due to the company's previous successful release cases in important celebration activities such as the Olympic Games and National Day, the company is more likely to get the Asian Games discharge projects. however, it is estimated that the scale of the Asian Games project is relatively small, and its contribution to the company's performance is limited.
We believe that the fireworks industry will be in a period of rapid development in the future, and the company will increase its profitability after the acquisition of Dongxin Company. we estimate that the company's EPS for 2010-2012 will be 0.30,0.38,0.42 yuan, taking into account the company's current high valuation level, it will not be rated for the time being, but remind investors to pay attention to the phased investment opportunities brought about by the bidding results of the Asian Games.
