Events:
Recently, the company news column published an article, the company was selected in Hubei Province, the first batch of pillar industry subdivision invisible champion enterprises.
Comments:
1. The company was awarded as the invisible champion enterprise, which was fully affirmed: after the evaluation work organized by Hubei Province, 46 enterprises, such as Kangxin Xincai, were identified as the first batch of invisible champion demonstration enterprises. The basic conditions that the enterprises need to meet include the following: (1) Enterprises should focus on the limited target market and mainly engage in manufacturing specific product segments. (2) the production technology and technology are leading in China, the product quality is excellent, the relevant key performance indicators are in the leading level of similar products in China, and have the strength of continuous innovation. (3) the business performance of the enterprise is excellent, and the profit margin exceeds the overall level of the same industry in the same period. This selection represents the direction and achievements of the company's development, and has been fully affirmed by the government and the market.
2. Industry leader, mainly engaged in container floor and environmental protection board: the company is a key national forestry industrialization leading enterprise integrating seedling raising, afforestation and wood deep processing. Container floor (15% of the market in 2016) and environmental protection board account for more than 80% of the income, and the overall gross profit margin is maintained at about 40%. In the past five years, the company's income has grown at an average annual compound growth rate of nearly 24%, and its home net profit has reached an average annual compound growth rate of 32%.
3. The company's fast-growing wood technology + forest board integration has the advantages of resources and cost, benefiting from the warming of the container industry: the company has mastered the fast-growing poplar technology of replacing tropical broad-leaved forest with sub-small fuelwood, as well as rich forest resources to reduce raw material costs; in line with the lightweight + low-cost industry trend of container manufacturing. The cumulative growth rate of container throughput of major ports from January to November 2017 was 8.7%, the highest in the same period since 2012, and the freight rate index rebounded. Since 2017, the volume of China's container exports has rebounded sharply, and the average price has rebounded relatively quickly. China International Marine Containers, the leader of the industry, container sales grew by more than 100% in the first half of this year compared with the same period last year, and the gross profit margin rebounded sharply. Through the expansion of production and the acquisition of New Huachang Wood, the company's market share is expected to increase to 25%, 30%, as a container floor leader, the most benefit.
Investment suggestion: as the leader of container floor (15% market share in 2016), the company steadily increases its market share through production expansion and acquisition of New Huachang wood industry, mastering fast-growing wood technology + forest board integration, in line with the development trend of container lightweight + low cost, benefiting from the warming of the container industry; COSB environmental protection board benefits from consumption upgrading. It is estimated that the EPS of 2017-2019 will be 0.47max 0.56 RMB.
Risk hint: the development of container industry and the application and promotion of OSB plate are uncertain, forestry disasters and so on.