\u3000\u3 China Vanke Co.Ltd(000002) 960 Jade Bird Fire Co.Ltd(002960) )
Event: the company announced the non-public offering plan and plans to raise 2.206 billion yuan for projects such as safety industrial park, Mianyang industrial base, intelligent fire fighting platform, overseas R & D center and supplementary working capital.
Give full play to the capital advantages of listed companies and seize the opportunity of accelerating the liquidation of the industry in the next five years. Due to the high degree of homogeneity of the products themselves and the lack of intuitive feeling for end users, the fire products industry has always faced the risk of low industry barriers and malicious price competition in the past development process, and the industry competition pattern is relatively bad. Since 2020, on the one hand, the prices of raw materials and labor have continued to rise, squeezing the profits of the industry; On the other hand, most of the current fire-fighting products are loaded with chips. The shortage of chips further reduces the living space of enterprises. It is rare for the whole industry to usher in the opportunity of reshuffle, and the advantages of leading companies are gradually revealed. On April 14, the national fire protection work plan of the 14th five year plan was put into effect. The degree of industry norms and product standards were further improved. The degree of industry reshuffle is expected to intensify and the market concentration is further improved. After the funds raised by the company’s non-public offering are in place, the orders, production capacity and funds in hand are full. We will seize the opportunity of accelerating the liquidation of the industry in the next five years, and the leading market share and leading position will be further consolidated.
Development of the company: from business scale to organizational structure, the prototype of an integrated platform for international fire products has emerged, with strong growth certainty.
Business scale: from 2016 to 2021, the company’s revenue increased from 1.3 billion to 3.9 billion, and the net profit attributable to the parent company increased from 280 million to 530 million. According to our calculation, by 2024, the company’s revenue scale was close to 10 billion, and the net profit attributable to the parent company exceeded 1 billion, and the prototype of large-scale comprehensive fire product platform appeared. The latest organizational structure of the company: 1) Hu Xiaohui, deputy general manager, once served as deputy director of sales in China of LG Electronics (China) Co., Ltd., director of fire business of building products division of Siemens (China) Co., Ltd., sales director of Tyco Fire China of Johnson Controls (China) Investment Co., Ltd., and has rich experience in market development, industry application and management of fire industry. 2) Qiu Zhiheng, deputy general manager, has been engaged in the fire protection industry for nearly 30 years. He has been deeply engaged in the independent innovation and R & D of automatic fire extinguishing products, participated in the formation of a number of patents and won many scientific and technological awards. He has long been committed to the application and promotion of fire protection in the industry, and has rich solution experience in communication, electric power, rail, petrochemical and other industries. 3) According to the public information of the company’s investor relations interactive platform, the former person in charge of production and manufacturing standards of Honeywell Greater China also joined the company to be responsible for product technology and R & D. To sum up, we can find that the best talents in the fire products industry are gathering in the company. From business scale to organizational structure, the company has developed into the prototype of an international and comprehensive fire product platform, with strong growth certainty.
Profit forecast and investment rating: we expect the company’s EPS to be 2.02, 2.74 and 3.67 yuan respectively from 2022 to 2024, and PE to be 20, 15 and 11 times respectively, maintaining the “buy” rating.
Risk tip: the decline of industry demand and the intensification of competition lead to the continuous decline of product price and gross profit margin
