Sinopharm Securities (19.80, -1.130, -5.40%) released the research report of the New Territories Pump Industry (12.71, 0.000, 0.00%) on March 9. The report is summarized as follows: We equipped with advance automatic screen printing machine, inkjet
screen making machine, autowashing & heatsetting machine which allow
us to make the Flag size up to 2*6 meters with 7 colors. Our factory
occupy the area of 3000 square meters, employ about 200 works,provide
the production daily capacity for 12000 ~15000 square meters. To protect
the environment,we also build the water recycling system according to
the standard of national environment protection.
With the reputation of products quality and creditability since
settled, we have made the project of supplying flags for: the 10th
national Games of china, the world table-tennis Championships, 2004
Athens Olympic games, 2008 Euro-Championships, 2008 Beijing Olympic
Games and Vancouver 2010 White Olympic Games.
As a leading manufactory certificated by ISO9001 in china,we are known
as the best quality, the reasonable price, and the fastest delivery. Now
our products already exported to all around world ,such as:Germany ,
Sweden , Switzerland, Belgium, Iceland ,Canada, Australia
,USA,UK,UAE,HongKong an Macao.
We will always assure of you to provide the best quality and
service. Welcome to contact us,for any question, in any time! ferrari flag,bmw flag,jeep flag,porsche flag,car window flags FlagKing Flags Manufacturing Co.,Limited , https://www.dgcnflagking.com
Investment logic
The pump industry demand has grown steadily. The global pump market demand will grow at an average annual rate of 6.4%. By 2015, the output value will reach US$70.8 billion, and the agricultural pump output value will be approximately US$6 billion. The sales volume of domestic pumps is about 120 million units, with an average annual growth rate of about 10%. The domestic agricultural pump output value is 25.5 billion yuan, domestic demand is 15 billion yuan. The average annual demand for pump products in urban sewage treatment is about 15 billion yuan.
Four major growth drivers for the agricultural water pump industry: 1. Policies to promote the development of the agricultural pump industry. 2. Farmers' income increased Pump self-preparation rate rose. 3, Agricultural machinery subsidies to promote the expansion of the scale of agricultural pump industry. 4. Land scale application and water-saving agriculture will increase the demand for pump irrigation.
The company is a leader in agricultural pumps and sewage pumps. The company's products include submersible pumps, land pumps, and sewage pumps, accounting for over 85% of revenue. In recent years, the export business has accounted for more than 40% of the total, and the main business is in Asia, Africa and Latin America.
The company has ranked No. 1 in the national production and sales volume of agricultural pumps for seven consecutive years, and its industry share is about 4%. In the past four years, the compound annual growth rate of revenue exceeded 26.3%, and the gross profit margin increased year by year.
The driving factors of the company's performance: 1. The investment in agricultural water conservancy will drive the average growth rate to remain stable in the next few years. 2. The demand for upgrades in volume and product upgrades. 3. The purchase of agricultural machinery subsidies policy to promote. 4. The overseas market warms up demand. The average annual growth rate of the industry is over 10%. The company has obvious brand advantages and will enjoy the industry growth and market share improvement. 5. The company opened its store at Tmall, and its online sales force.
Investment Advice
We forecast the company's EPS for 2015-2016 to be 0.43/0.55 yuan, and the current share price for PE is 29/23 times.
Valuation
We have selected the Southern Pumps (0.00, 0.000, 0.00%), Leo (0.00, 0.000, 0.00%), One Tow (12.51, 0.000, 0.00%), and New Research shares (0.00, 0.000,0.00%) For comparison, the average PE of the above four listed companies in 2015 was 43.3 times. According to the industry average PE, the target price for the New Territories pump industry is 18.5 yuan. We take into account the rapid growth of the New Territories pump industry in 2015-2017 and give the company a “buy†rating.
risk
The risks of the company mainly include: the risk of the water ten policies failing to achieve the expected risks, the risk that the company's gross profit margin cannot be maintained or increased, the risk of intensified competition in the industry, and the risk of deterioration of the export situation.