\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 99 Guangdong Xiongsu Technology Group Co.Ltd(300599) )
Investment summary
China plastic pipe head enterprise, focusing on new chemical plastic pipe products. The company is a leading manufacturer of large-scale plastic pipes and fittings in China, integrating the R & D, production and sales of series products such as polyvinyl chloride (PVC), polyethylene (PE) and random copolymerized polypropylene (PPR). In 2021, the company realized an operating revenue of 2.354 billion yuan (Unaudited), with a year-on-year increase of 13.77%.
Municipal engineering has ushered in the spring breeze of policy, and the development of underground pipelines has driven into the fast lane. The expansion of real estate infrastructure demand consolidated the expectation of steady growth, increased the penetration rate of hardbound and superimposed the construction of municipal pipe network, promoted the company to increase the PE pipeline business, sinking the broad market space and shaping the company’s new growth curve.
“Strong alliance” improved the regional layout, increased the scale and thickened the company’s performance. The company operates steadily, with 6000 kinds of subdivided products and six production bases, and the scale of production capacity continues to rise. The sales network covers all cities above prefecture level and important county-level cities in China. The combination of distribution and direct sales can greatly expand the source of income. The company plans to acquire Kangtai group. After the acquisition, the company will add six production bases and the annual production capacity will reach one million tons, so as to further expand the company’s scale, improve the industry competitiveness and thicken the company’s performance.
Profit forecast and valuation
The company deeply cultivates the plastic pipeline industry, focuses on the core areas, actively expands production capacity, improves the regional layout, and will boost the company’s revenue and profit level after successfully completing the acquisition of Kangtai group. We estimate that the company’s operating revenue from 2021 to 2023 will be RMB 2359 million, RMB 3814 million and RMB 5761 million, with a year-on-year increase of 14%, 61.7% and 51% respectively; The net profit attributable to the parent company was 117 million yuan, 272 million yuan and 417 million yuan respectively, with year-on-year changes of – 45.1%, 133.2% and 53.2% respectively. The EPS was 0.33/0.76/1.16 yuan / share respectively, corresponding to the share price on March 31. The Guangdong Xiongsu Technology Group Co.Ltd(300599) valuation in 2021 / 2022 / 2023 was 29 / 12 / 8 times respectively. It was covered for the first time and given a “buy” rating.
Risk tips
Price fluctuation risk of raw materials; Market competition intensifies risks; Risks that the implementation of investment projects such as raised investment and new production capacity cannot be digested in time; Uncertain risk of major asset restructuring.
