This report is read as follows:
Taking into account the valuation of the industry and comparable companies, as well as the underpricing behavior caused by the high price excluding the risk in the process of inquiry, we expect the offering price range of Zeda Yi Sheng to be 19.61-22.63 yuan.
Summary:
At present, the market has entered the stage of information effectiveness and inter-agency low-price game, taking into account the valuation of industry and comparable companies, as well as the underpricing behavior caused by high price removal risk in the process of inquiry. We estimate that the corresponding inquiry range of Zeda Yisheng on June 5 is between 19.61 yuan and 22.63 yuan.
Zeda Yisheng is the leading service provider of the whole industry chain of traditional Chinese medicine information in China, and the outstanding liquidity performance of financial data provides a guarantee for scale expansion. The business of the company starts with the informationization of pharmaceutical circulation and communication, and has gradually developed the layout of the whole industrial chain of traditional Chinese medicine agriculture in front of the industrial chain, including agricultural informatization of food and medicine source, middle-end pharmaceutical production informatization, back-end medical informatization and pharmaceutical circulation informationization, which is the scarce target in this field. Benefiting from the rapid development of China's software and information technology service industry and medicine and proprietary Chinese medicine industry in recent years, the company's revenue has grown rapidly in the past three years, growing by 9.40% in 2018 and 64.34% in 2019, respectively, and the compound growth rate of homing net profit in the past three years is 59.28%. The company's scientific research achievements are deeply integrated with the industry, and there are also some breakthroughs in non-information business. The company's largest customer is China Telecom Corporation, whose sales accounted for 36.16% of the company's total revenue in 2019. The cooperation project has improved year by year, and the cooperation relationship is stable. At present, the company's revenue scale is still small, but the liquidity financial indicators perform well, and the sales expense rate is significantly lower than that of comparable companies in the industry, which provides a guarantee for the company's future scale expansion, and will continue to benefit from the rapid development of the industry in the future.
Based on the above analysis and the disclosure of the company's prospectus, according to the similarity of products or business, we choose Weining Health, Venture Huikang, Heren Technology and Chaochao Information as comparable companies.
The price-to-earnings ratio of comparable companies is 62.09-118.98 times in 2019, with an average of 95.48 times, and the predicted price-to-earnings ratio in 2020 is 41.26-69.07 times, with an average of 49.05 times.
Reference to the company's industry "I65 Software and Information Technology Services" has a static price-to-earnings ratio of 59.26 times for nearly a month (as of June 3, 2020). Based on the valuation of comparable companies and industries, according to the 2019 net return profit disclosed in the prospectus, and considering the underpricing factors in the current inquiry process, we give a valuation range of 19.5-22.5 times PE, which is lower than the industry price-to-earnings ratio and the average price-earnings ratio of comparable companies. Based on the estimated total share capital of no more than 83.11 million shares, the estimated market capitalization after issue is 1.63 billion-1.881 billion yuan. The corresponding issuing price range is 19.61 yuan-22.63 yuan.
Risk tips: (1) beware of 10% high price rigid elimination risk and the second game behavior on the day of market quotation. (2) the speed of R & D and technology upgrading is not as fast as expected.