1
Company Profile
Oriental Yuhong was established in March 1998 and listed in 28. Now it has developed into a leading waterproof enterprise in China, which integrates research and development, manufacturing, sales and construction services of waterproof materials. It is a national high-tech enterprise with a nationally recognized enterprise technology center and Post-Doctoral Research Center.
In p>1995, it entered the building waterproof industry. Over the past 2 years, Oriental Yuhong has provided high-quality and complete waterproof system solutions for major infrastructure construction, industrial buildings and civil and commercial buildings, and has become a global waterproof system service provider. Under the guiding ideology of "industry serving the country and serving the people", the company's investment also involves nonwovens, building energy saving, mortar and other fields. The company has: Oriental Yuhong (engineering business), Yuhong (civil building materials), Woniushan (energy saving and thermal insulation), Fuda (energy saving and thermal insulation), Tiandingfeng (non-woven fabric), Fengxing (waterproof), Huasha (mortar), Lodi (diatom mud), Dewei (architectural coating), building repair and other brands and business sectors. Oriental Yuhong holds more than 5 molecular companies, including Shanghai Oriental Yuhong, Hong Kong Oriental Yuhong and Oriental Yuhong North America Co., Ltd., and has laid out 27 production, R&D and logistics bases throughout the country.
2
Industry analysis
The company belongs to the building waterproof industry. Waterproof materials are very important building materials, and their quality and application effects play a very important role in the structural safety and service life of building projects. With the rapid development of China's national economy, not only industrial buildings and civil buildings have put forward many varieties and high-quality requirements for waterproof materials; High-quality waterproof and sealing materials are also needed in industries and fields such as bridges, tunnels, national defense and military industry, agricultural water conservancy and transportation. It should be said that waterproof materials cover a wide range in the field of construction.
waterproof materials involve a wide range of fields, and there are many waterproof production enterprises at present. Except for a few enterprises with high overall level, most enterprises are small in scale, backward in technical level and production technology, the market is full of counterfeit and substandard products, backward overcapacity, nonstandard competition in the industry, and prominent environmental problems in the industry have led to low concentration and nonstandard market competition in the domestic building waterproof materials industry. At present, the company is located in this "small company, big industry" pattern, plus the external capacity reduction and strict supervision environment. Personally, I think it will bring a good development opportunity to the company, because the construction industry is the pillar industry of the national economy and an important force to promote the rapid growth of China's national economy. As a small company in this big industry and a leading company in a sub-industry, I think the future development potential of such a company is unlimited, and of course it is also related to the management of the company.
Figure 1: Output statistics of waterproof construction industry in China from 21 to 217 (unit: 1 million square meters)
Figure 2:? Sales revenue of waterproof building materials industry in China from 21 to 217
Summary: Building waterproof industry is a big industry. From the data analysis, there is a certain degree of prosperity in this industry. From the national development strategy for infrastructure and architecture, the prosperity of this industry can be expected.
3
Fundamental analysis of the company
(I) Business model
The company is a professional integrated waterproof system service provider integrating R&D, production, sales, technical consultation and construction services. Simply speaking, the company earns profits by selling waterproof materials and providing construction services. The company is in the middle of the industrial chain, and the upstream is the supplier of waterproof raw materials, which is the petrochemical industry. Downstream is the construction industry, for which the company provides products and services. This business model is comprehensive and integrated, and it is not complicated. Compared with some small enterprises in the industry, it has certain competitive advantages. In terms of purchasing mode, the company has a long-term and stable cooperative relationship with suppliers, such as China Petroleum and Natural Gas Co., Ltd., China Petrochemical Co., Ltd., Dongfang Petrochemical Co., Ltd., etc. From the perspective of material supply, if the company can maintain a close cooperative relationship with upstream suppliers for a long time, then the company may be able to occupy a certain advantage in cost. From the production mode, the company is one of the most complete and perfect waterproof materials for buildings in China. In other words, the company's money-making field is very comprehensive, as long as it involves waterproof materials, the company can rob this field. Direct selling and distribution are adopted in the sales mode. Direct selling can grasp the terminal of the market, and distribution can face more demand groups.
On the whole, the business model of the company is very common, with no bright spots, but it is relatively perfect and mature. In this typical "small company and big industry", it is the most critical whether this business model can bring economic benefits to the company continuously. The industry has given the company unlimited possibilities and fantasies, but ultimately it depends on how the company operates and develops. In addition, the company is in the middle of the industrial chain, and the uncertain factors at both ends will also bring great challenges to the company.
(II) Core competitiveness
1. Specificity
2. R&D capability
The waterproof technology research institute of the company was approved as the "national recognized enterprise technology center" in November 29, which is the first national enterprise technology center in the domestic waterproof industry and the only national key laboratory for building waterproof materials with special functions.
The above picture shows the R&D expenses of all companies in the waterproof material industry in the past 1 years. Among them, the main business of the first four companies is not waterproof materials, but only a small part. It is Keshun that really matches the business of Oriental Yuhong Company. It can be seen that Oriental Yuhong has invested far more money in R&D capabilities than other companies, which is obviously a manifestation of competitiveness. The company's technical development and innovation ability can meet the different requirements of different customers for waterproof materials. In a deeper sense, this R&D ability also builds the company's technical barriers, and the continuous introduction of new products will make the company at the leading level in the industry.
3. Distribution of production capacity
The company has established production logistics R&D bases in North China, East China, Northeast China, Central China, South China, Northwest China and Southwest China. The company's production capacity is widely and reasonably distributed, ensuring that the company's products radiate to the national market with lower warehousing and logistics costs, and it has incomparable competitive advantages in meeting customers' diversified product needs and national supply requirements.
summary: generally speaking, the company has certain competitive advantages in the field of waterproof materials, especially in the research and development ability, which is at the leading level in the industry. The research and development ability actually represents this kind of technical advantage. Maintaining this advantage can improve the production efficiency of enterprises and bring them higher returns, and at the same time, it can quickly meet various market demands.
(III) Moat
1. Return rate
Let's look at the company's gross profit margin. Here, I only compare Keshun shares that match the company's business with the company. The specific data are as follows:
From the perspective of gross profit margin, the gross profit margins of the two companies are basically kept at the same level, so there is no distinction between who is superior and who is inferior. Speaking of gross profit margin, let's take a look at the company's past years:
The above picture shows the company's gross profit margin in 217. From the company's internal perspective, the company's higher gross profit margin is mainly reflected in the sales of waterproof materials and products, and the company's higher gross profit margin is mainly reflected in waterproof materials and waterproof coatings. The following figure shows the trend of gross profit margin in recent ten years:
2. The proportion of three fees and revenue
Let's compare the proportion of three fees between Keshun and the company. The first picture above shows the proportion of three fees between the two companies, which should be said that the difference is not very big. Oriental Yuhong's proportion of three fees is slightly lower than Keshun's. After reading the specific situation of the two companies' expenses in the next five years, it is obvious that Oriental Yuhong is much larger than Keshun's in the scale of three fees.
3. Conversion cost
The company is a small company in a big industry, with a low concentration of industries and numerous waterproof manufacturers. The company does not have an advantage in conversion cost, and the company has not laid out industries in every corner of the country. All materials that can play a waterproof role will be considered by the demand side, that is to say, the waterproof material of Oriental Yuhong is not the only choice for the demand side, and it is not sticky enough for users, so there is a certain degree in this respect.
4. Brand effect
The company is the first listed company in the domestic building waterproof industry. Since its establishment, it has undertaken a large number of waterproof projects of national key construction projects and renovation projects, achieved excellent business performance, and cultivated the company brand. The brand "Yuhong" has been recognized as "China well-known trademark" and is the first "China well-known trademark" in the building waterproof material industry in China. In this respect, the company has a certain brand effect.
conclusion: after the above analysis, I personally think that the company has a certain moat, which is reflected in its scale and brand. However, this moat is not strong, the company has no absolute advantage to prevent competitors from entering this industry, and the concentration of this industry is low. Many small companies may be future competitors of the company, and these unknown risks will bring uncertainty to the company's future operating efficiency.
(4) Growth Analysis (ROE)
The above figure lists the ROE levels of companies involved in the waterproof industry in the past 1 years. Oriental Yuhong ranks second among these companies, but Golden Mantis's main business field is only a little bit in the field of architectural decoration and waterproof, not its main business. Except Golden Mantis, Oriental Yuhong ranks first, and the company has a high ROE. We split ROE into two parts.
return on net assets (ROE)= net interest rate * total assets turnover rate * equity multiplier
1. net interest rate
Let's first look at the upstream raw materials. The price of raw materials is mainly affected by oil prices. The following figure shows the trend of crude oil prices in recent 3 days and the trend of oil inventory and price changes in recent years:
In p>217, domestic crude oil output was 192 million tons, showing a downward trend for two consecutive years. It seems that the crude oil price will remain at a high level in the future, so the company's material cost will remain at a high level in a short time.
Let's look at the history of the company's period expenses:
The company's financial expenses and sales expenses have been rising steadily over the years, mainly due to the company's expansion of production, and the company's financial expenses have turned a corner, especially in 217, mainly due to the interest expenses of loans and convertible bonds issued. From the perspective of the company's future strategy, the company's goal will involve all parts of the country, so the period expenses will definitely need to be mentioned, and the proportion of the three expenses may still fluctuate at a certain level.
so, in summary, from the perspective of cost price, the company's net interest rate has limited room for improvement.
2. Total assets turnover rate
3. Equity multiplier
Generally speaking, the company's higher ROE level is affected by higher net interest rate, higher total assets turnover rate and higher equity multiplier. These three indicators that constitute the company's ROE are relatively balanced. It is possible for the company to further improve its ROE level. The most important thing is to see whether the net interest rate and total assets turnover rate can be further improved. However, the key to improving these two indicators is still.
I have repeatedly mentioned the core vocabulary of the company's operating income. I would like to add that the company's future revenue forecast shows that the growth rate of national infrastructure investment from January to June 218 is 7.3%, which is a cliff-like decline compared with the growth rate of 21.1% in the same period last year. It is mainly related to the high pressure of the Ministry of Finance to clean up the hidden debts of local governments, and it is also related to the substantial tightening of fiscal policy. Let's take a look at the company's revenue in the first half of 218:
At present, the company continues to expand its production capacity, with an annual output of 2,4 yuan in Wuhu, Anhui Province, and in Qingdao. Ten thousand square meters waterproof coiled material, 4? Ten thousand tons of waterproof coating, 2? Ten thousand tons of mortar and 1? Ten thousand square meters TPO? The project has been put into production one after another, and the revenue growth rate is expected to further increase. I conservatively believe that the company's operating income will increase at a rate of 3% in the next three years. In 22, the company's revenue scale will exceed 22.5 billion, and in the next five years, the company's revenue will be close to 4 billion, corresponding to the current market value of the company of about 2 billion, which should be considered as value for money. Moreover, I only made a conservative estimate here, and the market share of this level is still very low, so I think there is still a lot of room for growth in the future.
(V) Security analysis
1. Asset-liability structure
The above picture is a screenshot of the company's 217 annual financial report. Briefly, the company's total assets are 13.3 billion, and its current assets are more than 9 billion, including more than 2 billion monetary funds, more than 4 billion accounts receivable and 1.5 billion inventory. The reserves of cash and cash equivalents are less than 3 billion. Look at the company's debt structure again. The company's total liabilities are more than 6 billion, current liabilities are more than 4 billion, and the asset-liability ratio is about 45%. Within the normal range, in the short term, the company's current liabilities of more than 4 billion correspond to about 3 billion in cash and cash equivalents, which has certain pressure, but does not pose a threat.
The chart above shows the trend of the company's asset-liability ratio in recent ten years. Obviously, there was an obvious turning point between 213 and 214, mainly due to the increase of the company's total assets due to the completion of the company's non-public offering of shares. The company's asset-liability ratio has increased with the expansion of the industry and the issuance of convertible bonds in recent three years, which is within the normal range at present. However, whether the subsequent companies continue to expand production capacity and continue to increase market share will affect the company's asset-liability structure needs continuous attention.
Let's take a brief look at the company's capital flow. The company's advance receipts+payables are about 1.5 billion, and accounts receivable+prepayments+inventories are about 9 billion. Generally speaking, (advance receipts+payables) > (A/R+Prepayment+Inventory) can show that an enterprise is awesome and can use other people's money to make money, which reflects the bargaining power of the company to the upstream and downstream and the credit granted by the upstream and downstream to the company. Such a company is in a strong position in the market. Obviously, it can be seen that the company does not belong to such an enterprise, and its bargaining power is weak. Of course, this is also a feature of the construction industry. There are most accounts receivable and advances, and generally the funds will be withdrawn at the end of the year.
2. Cash flow
4
Company valuation
1. From the perspective of future valuation
We will consider the valuation of the company from three aspects. First, the profit growth of the company; Second, the environmental situation of the market; Third, the importance of time.
(2) judging from the market environment, the current market is a bear market, and I assume that the future market will continue to be a bear market.