[Reprint] three General drug industry (600869) �C blue chip form first, giving "strongly _ na Buddhists

Original address: �C blue chip form first, given the "highly recommended" "> three General drug industry 600869 �� blue chip form first, given the" highly recommended "author: shanghaizhengquanhuiguan three General drug industry (600869) �C blue chip form first, given the" highly recommended ": current summary, reorganization of work has been completed, the company realized from medicine to the complete restructuring of the cable. Among them, the far East holdings of stock quantity reaches 34098 million shares, the percentage increases to 79.77%. In our specific macroeconomic model, fixed asset investment to maintain the growth rate of 25% will be the long-term trend for wire and cable industry for the development of the market space. Far East Group cable business is the absolute leading enterprises, production scale has been ranked first in the cable industry and ge. Technology in the domestic leading position, the product structure is abundant, the product has high profitability. In 2010, with the gradual improvement of macro-economic, industry faces more favourable changes. On the one hand, the macro-economic boom indicator is rising on the positive impact of the cable requirements, on the other hand, copper prices rise on product profitability. Carbon fiber composite conductor is representative of the new material cable, is the company's core competitiveness. The company is the sole enterprise, will also be the company's new profit growth point. Carbon fiber wires due to the high technical barriers, product gross profit margin close to 40%, more than 20% of the net interest rate, the expected profit contribution of 2011 will gradually increase the percentage. According to the company upon completion of the issuance of the total share capital 42743 million shares calculation, it is expected that by 2010, 2011 and 2012 earnings per share were $ 1.01, $ and $ 1.85 1.41, compound annual growth rate of more than 30%. We give companies the 2010 and 2011 target earnings are 30 times and 25 times the corresponding price range $ 30 ~ $ 35. Distance from the current stock price is 40% of the space, giving rise to "highly recommended" rating. What this tiger S1080210110002 Tel: 0755-25832648 e-mail: hebenhu@fcsc.cn transaction data 52 weeks the stock price range ($) 11.5-23.78 market capitalization ($ million) 9,236.82 circulation shares (million shares) 120.00 circulation unit ratio (%) 28.1% abridged (09/10) shareholders 1,420.50 net assets per share 3.32 shijinglv 6.50 asset-liability ratio 83.0% companies and CSI 300 index comparison report rating: highly recommended power equipment and new energy sectors 1, about yuandongkonggujituan created in 1990, is a wire and cable, pharmaceuticals, real estate, investment for the core business of large-scale private joint-stock enterprise. Group assets of more than 80 million Yuan, annual sales income over $ 10 billion, is the cable industry's leading enterprises. 2010-29 September, the company issued to a specific object and a significant stock purchase assets assets reorganization of the application is approved, the Commission means that lasted a year and a half in the final stages of the reorganization. At present, the reorganization of work has been completed, the company realized from medicine to the complete restructuring of the cable. Among them, the far East holdings of stock quantity reaches 34098 million shares, the percentage increases to 79.77%. Table 1 lists the company share capital structure changes before and after the issuance of additional shares (million shares) ratio (%) of shares (million shares) ratio (%) in the far East holdings 3355 27.96 3409879.77 other 8645 72.04 8645 20.23 total 12000 100 42743 100 data sources: company announcements 2, industry news 2.1, cable industry and fixed asset investment highly associated wire cable for power transmission link, its scope covers all areas of electric power. Therefore, wire and cable industry has become the foundation of the national economy, production scale become industry is second only to the machinery industry, the second largest industry. From the largest category, wires and cables into naked wires and cables. Among them, the cable can be divided into wires, power cable, the special cable and new materials for cables, etc. Wire and cable because of its use of the special nature of the area, with its associated maximum macro-economic sections belonging to the investment in fixed assets. We selected 2003-2009 by fixed asset investment and wire and cable industry's output value to both of the correlation coefficient 0.955. In our specific macroeconomic model, fixed asset investment to maintain the growth rate of 25% will be the long-term trend for wire and cable industry for the development of the market space. Figure 1 output value of China electric wire and cable industry and fixed asset investment year change comparison chart 050000100000150000200000 2500002003 year 2004 2005 2006 2007 2008 2009 070008000 010002000300040005000600 fixed assets investments (billion) cable output value (million) data sources: WIND information 2.2, macroeconomic upturn on industry's strong impetus to 2010, with the gradual improvement of macro-economic, industry faces more favourable changes in the market is faced with more opportunities. On the one hand, the macro-economic boom indicator is rising on the positive impact of the cable requirements, on the other hand, copper prices rise on product profitability. Specific to the far East cable group, change factors primarily into three aspects: on the one hand, the sales amount will still be maintained 15%-20% growth on the other hand, the price of copper prices expected to increase, allowing product average unit price increases of 25%. Thirdly, the estimated gross margins have declined, but the extent is not large, and the corresponding gross margin will rise. Combined with the recent performance of copper prices, the depreciation of the dollar and the currencies of adequate background, as a typical representative of copper resources continues strong rebound in copper prices close to 5 years of high, on a device characteristics of cable industry form a substantial benefit. For careful consideration, we at 2011-year performance prediction do not consider copper prices rise on the positive performance of the company. From economic trends, the 2010 first quarter GDP growth reached 11.9%, second-quarter decline, 11.1%, but still at a relatively high level, the whole year is expected to decline, but still reached 10%. Pursuant to an undertaking the Securities Institute of forecasting, 2010 9.8% in 2011 and 2012 will remain steady growth, GDP growth is maintained at 8.5%, a relatively favourable external environment of the cable industry. Graph 2 GDP growth compared to the annual variation in GDP growth 0.0% 2.0% 4.0% 6.0% 8.0.0.0.0.003 year 2004 2005 2006 2007 2008 2009 2010E2011E2012E data sources: WIND information, first venture Securities Institute Figure 3 annual copper price changes compared to closing price (Yuan) 010000200003000040000500 0060000700008000028-Apr-0028-Oct-0028-Apr-0128-Oct-0128-Apr-0228-Oct-0228-Apr-0328-Oct-0328-Apr-0428-Oct-0428-Apr-0528-Oct-0528-Apr-0628-Oct-0628-Apr-0728-Oct-0728-Apr-0828-Oct-0828-Apr-0928-Oct-0928-Apr-1028-Oct-10 data sources: WIND information, first venture Securities Institute 3, the company belongs to the absolute cable industry leading 3.1, company size advantages far East Group cable business is the absolute leading enterprises, production scale has been ranked first in the cable industry and ge. 2009 revenues of about 80 billion, roughly equivalent to one of the industry leaders of Po-2 x shares. If the deduction of business wire, revenue scale the rough equivalent of Baosheng shares of 170%. In the overall listing is completed, three drugs industry will become the cable leading new business structure. At the same time, it will replace Baosheng shares become listed family new industry leaders. Table 2 far East holdings and shares in size compared Baosheng 2009 revenue ($)-bare wire does not contain raw wire far East Group 75 37 34 59 Baosheng shares ratio 2.0 1.7 data sources: WIND information, first venture Securities Institute 3.2, technological level of the domestic leading level of domestic and foreign product comparison, overall differences evident. My only 30 percent of the cable varieties reached the international level, there are 70% of cable needed to increase product variety and quality. In addition, as the competition's main business, yet able to contend with cable multinationals. To power cable, for example, kV voltage level of the product, the gap has been at home and abroad. In the field of domestic 110KV-220KV only some of the companies to produce, and the vast majority of enterprises lack the appropriate skill level, approximately 50% of the products still rely on imports. In the field of domestic 500KV only few Luneng cables with corresponding production enterprises, domestic-related market is dominated by foreign countries. As the dominant enterprises, far East cable is rarely have the international competitiveness of enterprises. Far East cable as a domestic leading enterprises, technical standards in the first-class enterprise. Table 3 list of cable industry competition pattern classification name company name market scope first camp France Italy Naikesen group, Pirelli Group, Japan Furukawa cable, Japan Sumitomo Electric, Jiangsu Yuandongkonggujituan co., Ltd., etc. 110KV voltage HV, above the second camp in Jiangsu Province on the cable, Jiangsu Baosheng shares, Zhejiang wanma cable, Jiangsu Yangtze River cable, Tianjin Suli cable, Qingdao Hanlan group, Guangdong Nanyang shares, etc. 35KV and below, and a competitive advantage in the 6KV ~ 35KV range third camp other lack of competitiveness of small and medium-sized cable companies. Mainly 1KV cable production data sources: the first venture Securities Institute as competition in the cable industry is full of technical barriers to trade, is not high. Higher value-added areas mainly concentrated in the high-voltage cables, special cable and new materials for cables, the company has a comparative advantage. The company is one of the few have 500kv development and manufacturing capabilities of the enterprise. In cable technology content indicators, voltage level is one of important indicators. With many enterprises of technological progress, reducing the threshold of 110KV, company of 110KV cable performance stability are still at the forefront of the country. The company is one of the few companies with a production capacity of 220KV, has successfully developed the 500kv, advantage further consolidation. In the field of special cables, company and stock level Baosheng. Baosheng company is one of the special cable and outstanding enterprises representative, and a technical comparison Baosheng shares, the company does not have an absolute advantage, both basic is on the same horizontal lines. In addition, special cable as high added value products, dedicated and strong, our country has been a net importer of that product with import substitution, will ensure the company's industry competitiveness. Figure 4 my special cable import scale comparison chart import (IMEX circle) 0.0010.0020.0030.0040.0050.0060.0070.0080.002004 year 2005 year 2006 year 2007 year 2008 year 2009 year data sources: WIND information, first venture Securities Institute 3.3, carbon fiber cable international standard carbon fiber composite conductor is representative of the new material cable, is the company's core competitiveness. The company is the sole enterprise, will also be the company's new profit growth point. ACCC carbon fiber composite conductor is currently the world's electricity transmission and distribution system ideal for replacing traditional steel aluminium hinged wire, Aluminum-clad steel wire, aluminum alloy wire and INVAR wire's new product, the ACCC carbon fiber composite conductor compared with traditional wireWith light weight, high strength and low loss, relaxation of small, high temperature resistance, corrosion resistance, and environment compatibility, etc., makes the rod, the span between the Tower, height, the same capacity line low cost than ordinary wire. At present, the ACCC conductor was in the far East, China Southern power grid company, the State's 20 provincial power companies to successfully run the net, this is the United States in 2004 after running NET business world and the second uses the advanced technology of the State. In contrast, carbon fiber composite conductor is currently the biggest disadvantage is cost significantly higher than ordinary wire. Although the price of carbon fiber wire from the General cable 10 times dropped to 5 times, but is too high, and also restricting the promotion of speed. However, there is some positive factors. In carbon fiber wire manufacturing of three links, from materials to the mandrel is mainly concentrated in the hands of foreign countries, only from the mandrel processed into the wire segments from the far East cable to complete. Of these, mandrel manufacturing is concentrated mainly in Japan's Toray company, but the CTC mandrel is United States Canada commissioned to complete. Through commercial negotiations, mandrel manufacturing sectors is expected from the far East cable production, is expected to enable cost reduction of 20% or more. In addition, the Institute of aerospace composites in Xi'an-led research breakthrough, localization for materials laid the Foundation for the carbon fiber wire provides comprehensive promotion may. Basis for our tracking information, carbon fiber wires due to the high technical barriers, product gross profit margin close to 40%, more than 20% of the net interest rate, the expected profit contribution of 2011 will gradually increase the percentage. Table 3 carbon fiber wire and ordinary wire specification list specifications ordinary wire strength of carbon fiber composite conductor 1240Mpa-1410Mpa2480Mpa-2820Mpa conductivity 1 1.06 weight 1 0.8 corrosion-resistant aluminium consumption 1 2 1 0.5 data source: the first venture Securities Institute Figure 5 carbon fiber cable manufacturing process flow diagram data source: the first venture Securities Institute 3.4, product structure rich far East Group's cable business including bare conductors, low-voltage cables, high-voltage cables, wires, electrical cables, carbon fiber wire products, basic covers all products in the cable industry. From the product structure, belongs to the high-end of the special cable and new materials for cables and the proportion of high voltage cable is 50%. Combined with the cable industry market analysis, technical barriers and market size render a reverse relationship, low-end products scale to larger than high-end products. Therefore, the mixed product structure more favourable to the company's sustained growth. Material plug wire diagram 6 main products structure comparison chart-voltage in MV 20% 29% wire 10% new material 6% special 15% wire 20% source: first venture Securities Institute 3.5, products with high profitability as excellent private enterprise, the company's operating management advantages more obvious. Of these, most notably in the form of products of good profitability, and this is our continuous growth is optimistic about the company. If one of the industry leading enterprise of Baosheng shares, it is not difficult to discover, the company's gross margin level of series has a clear advantage. For example, the added value of lower wire, companies can achieve 17 percent of gross profit and gross margin of Baosheng shares is less than 5%. In addition, the gross profit margin edge or wires are obvious. Gross margin as the net profit level in one of the core factors, high gross margin level also allows companies with better growth, also has relatively gaoguzhi Foundation. Figure 7 companies and Baosheng shares leading product gross profit margin comparison chart 0.0% 5.0.0.0.0% .00.05.0 @ .0E.0% power cables and wires, new materials, special wire far East cable Baosheng shares data sources: WIND information, first venture Securities Institute 3.5, pharmaceutical industry position declined the company's pharmaceutical business 2009 revenue 21207 million, and basic fair 2008. As the company business transformation, traditional medicine business will gradually marginalized, on company performance impact can be ignored. Since the product has 35% of the gross margin, profit and loss balance can be achieved without the formation of overall performance. 4. earnings forecast, valuation and investment recommendations 4.1, critical assumptions 1, income product prices: we expected 2010 copper price on the product price is 20% in 2011 and 2012 price copper price to maintain the average level of 2010, apart from carbon fiber wire, other product prices unchanged, carbon fibers are dropped 10%; the number of products: in 2010, we assume that the bare conductors, wires and the quantity of carbon fiber wire 10% growth, special cables and power cables are increased by 20%. 2011 and 2012, bare conductors, wires and 10% of the quantitative growth, special cables and power cables are increased by 20%, respectively, in accordance with the quantity of carbon fiber 90% and 50% of the growth assumptions; pharmaceutical business: 2010-2012 annual revenue growth of 10%. 2. gross profit margin, bare conductors: 2010, assuming that 14%, 2011 and 2012 to maintain the level; wire 2010: 2010 ~ 2012 gross margins are 16%, compared to a certain extent 2009 decreasing of; xlpe cables: 2010 ~ 2012 gross profit margin were 17%, the reasons and bare wire business similar; carbon fiber: 2010 ~ 2012 gross margins are 40%; special cable: 2010 ~ 2012 gross margins are 23%; medicine: 2010 ~ 2012 gross margins were 35%, maintaining the level of 2009; 3, the cost rate in operating expenses during the period: 2010-2012 annual average of 9%, mainly with reference to the normal year 2007 business and company at present dynamic data; management fee rate: 2010 ~ 2012 respectively 2.0%, 1.9% and 1.8%, the main reference 2010 Q3 financial data and scale effect expected; 4, income tax rate for the company belongs to the high-tech enterprise, 2010 ~ 18% annually by 2012, and the third quarter of 2010; basic consensus earnings forecast: 4.2, profit forecast by the companyIssuance of completion of the total share capital 42743 million shares calculation, it is expected that by 2010, 2011 and 2012 earnings per share were $ 1.01, $ and $ 1.85 1.41, compound annual growth rate of more than 30%. 4.3, valuation and investment advice we give to the company in 2010 and 2011 target earnings are 30 times and 25 times the corresponding price range $ 30 ~ $ 35. Distance from the current stock price is 40% of the space, giving rise to "highly recommended" rating. 5. risk Tip 1, raw material price fluctuation risks. 2. new product promotion risk. Table 5-led product revenue and gross profit forecast table 2009 2010E 2011E 2012E a, bare wire income (millions) 1610 20932302 2533 growth 15% 30% 10% 10% gross margin ($ m) 242 293 322 355 gross margin 15.0% 14.0% 14.0% 14.0% 2, wire income (millions) 525 683 751 826 rate-25% 30% 10% 10% gross margin ($ m) 120 89 109 132 gross margin 17.0% 16.0% 16.0% 16.0% of xlpe cable revenue (million) 3060 4284 5355 6694 rate-10% 40% 25% 25% gross margin ($ m) 581 728 910 1138 gross margin 19.0% 17.0% 17.0% 17.0% 4, carbon fiber income (millions) 403 523 15% growth rate in 942 1319 30% to 80% of the 40% gross margin ($ m) 161 209 377 527 gross margin 40.0% 40.0% 40.0% 40.0% v. Special income (millions) 900 1260 1575 1969 rate-25% to 40% 25% 25% gross margin ($ m) 207290 362 453 gross margin 23.0% 23.0% 23.0% 23.0% 6, pharmaceutical revenue (million) 220 242 266293 growth 10% 10% 10% 10% gross margin ($ m) 77 85 93 102 gross margin 35.0% 35.0% 35.0% 35.0% 7, total income (millions) 6718 9085 11191 13632 growth-7.3% 35.2% 23.2% 21.8% gross margin ($ m) 1357 1714 2185 2707 gross margin 20.2% 18.9% 19.5% 19.9% source: first venture Securities Institute table 6 earnings forecast forecasting table million 2009 2010E 2011E 2012E a, operating profit revenue 212 9085 1119113632 less: operating costs reduced 134 7370 9006 10925: business tax payments and additional-2 27 34 41 less: operating expenses 70818 1007 1227 less: management costs 16 182 213 245 less: financial costs 7 164 190 232 less: 12 assets impairment losses plus: investment income 0 0 0 0 operating profit-26 524 741 962 2, total profit plus: non-operating income 38 0 0 0 total profit 963 12 524 741, net profit less: income tax 10 94 133 173 net profit 2 430 608 789 fourth, the parent company net profit minus belonging: minority shareholders ' loss 0 0 0 0 belong parent company net profit 2 430 608 789 total equity 427.43 EPS ($) 0.005 1.011 1.42 1.85