I. Overview of events
Recently, we conducted a survey of the company and had an in-depth exchange with the company on the situation of the integrated ceiling industry.
II. Analysis and judgment
The real estate industry is picking up, and the company, as a leader in integrated ceilings, is expected to continue to benefit. According to the National Bureau of Statistics, real estate fixed asset investment in February 2019 increased by 10.6% year-on-year. New construction increased by 6% year-on-year. The cumulative year-on-year growth figures in March were 11.4% and 11.9% respectively, significantly higher than the February data, and the real estate industry picked up. The company is the vice president of China Architectural Decoration and Decoration Materials Association, the chairman of ceiling materials branch of China Architectural Decoration and Decoration Materials Association, and the leading maker of integrated ceiling "made in Zhejiang" group standards. the first enterprise in the industry has passed the certification of "made in Zhejiang". The company has extensive and in-depth strategic cooperation with the leaders in the real estate and home decoration industry. The company has carried out business cooperation with a number of excellent domestic real estate companies, such as Evergrande, Vanke, Greenland, China Resources, Poly, Zhongnan, etc., and excellent home decoration companies in the industry, such as Love Space, comfort Wo, B & Q, Orange Home, Shengdu Decoration, living net, etc. We judge that with the recovery of real estate, the company as an integrated ceiling leader is expected to continue to benefit.
Establishing the overall solution of ceiling and wall as the core, and benefiting from the concept of environmental protection and efficient decoration, the promotion company revolves around the strategic direction of "thinking about ceiling and wall together and designing better ceiling and wall". The overall solution of ceiling and wall in home space is established as the core development direction. Integrated ceiling and modular wall are upgrading products of traditional wall and ceiling, which have the advantages of high efficiency, environmental protection, beauty and comfort compared with traditional products. Although the home decoration integrated ceiling industry has a certain scale, but the development of the industry is only more than ten years, the share of residential decoration ceiling is still small, the main market is still occupied by the traditional ceiling. With the improvement of residents' living standards and the promotion of the concept of environmental protection and convenient decoration in the future, integrated ceiling and modular walls are expected to quickly replace traditional products. According to the 2018 annual report, the revenue of gypsum, home and wall modules was 45 million, an increase of 224% over the same period last year, reflecting the rapid growth of orders brought about by the modular overall solution.
Third, profit forecast and investment suggestions:
It is estimated that the EPS of the company in 2019-2021 is 1.22,1.37 and 1.49 yuan respectively, and the corresponding PE is 22 times, 19 times and 18 times respectively. At present, the average valuation of other building materials industries is 28 times higher than that of the company. in addition, taking into account the warming of the real estate industry and the promotion of the concept of environmentally friendly and convenient decoration, the company's modular integrated ceiling and walls are expected to benefit directly, giving a "recommended" rating.
Fourth, risk tips:
The progress of the modular project is lower than expected; the growth of real estate starts is lower than expected.
