0 1
company profile
Oriental Yuhong was founded in March 1998 and listed in 2008. Now it has developed into a leading waterproof enterprise integrating research and development, manufacturing, sales and construction services of waterproof materials in China. Is a national high-tech enterprise, with a nationally recognized enterprise technology center and postdoctoral research center.
1995 entered the building waterproof industry. Over the past 20 years, Oriental Yuhong has provided high-quality and complete waterproof system solutions for major infrastructure construction, industrial buildings and civil 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 conservation, mortar and other fields. The company owns: Oriental Yuhong (engineering business), Yuhong (civil building materials), Woniushan (energy saving and thermal insulation), Duff (energy saving and thermal insulation), Tiandingfeng (non-woven fabric), Fengxing (waterproof), Warsaw (mortar), Luoti (diatom mud), Dewei (architectural coating), building restoration and other brands and business sectors. Oriental Yuhong holds more than 50 molecular companies such as 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.
02
industry analysis
The company belongs to the building waterproof industry. Waterproof material is a very important building material, and its quality and application effect play a very important role in the structural safety and life of building engineering. 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; Bridges, tunnels, national defense, agriculture, water conservancy, transportation and other industries and fields also need high-quality waterproof sealing materials. It should be said that waterproof materials cover a wide range in the field of construction.
Waterproof materials are involved in a wide range of fields because there are many waterproof production enterprises at present. Except for a few enterprises with high overall level, most of them are small in scale, backward in technical level and production technology, full of fake and shoddy products and non-standard products on the market, backward overcapacity, irregular competition in the industry and prominent environmental problems in the industry, which leads to low concentration of domestic building waterproof materials industry and irregular market competition. At present, the company is in this pattern of "small company, big industry", and the external production capacity is reduced, and the regulatory environment is strict. Personally, I think it will bring good development opportunities 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 the national economy in China. 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.
Figure1:2010-2017 China waterproof construction industry output statistics (unit: 100 million square meters)
Figure 2:? 20 10-20 17 sales revenue of waterproof building materials industry in China.
Summary: Building waterproof industry is a big industry. From the data analysis, there is a certain degree of prosperity in this industry. Judging from the national development strategy for infrastructure and architecture, the prosperity of this industry can be expected.
03
Fundamental analysis of the company
(A) business model
The company is a professional waterproof system integrated service provider integrating R&D, production, sales, technical consultation and construction services. Simply put, 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 not complicated. Compared with some small enterprises in the industry, it has certain competitive advantages. In terms of purchasing methods, the company has long-term and stable cooperative relations with suppliers, such as China Petroleum and Natural Gas Co., Ltd., China Petrochemical Co., Ltd. and Dongfang Petrochemical Co., Ltd.. From the perspective of material supply, if the company can maintain close cooperation 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 in China. In other words, the company's money-making field is very comprehensive, as long as it involves waterproof materials, the company can grab this field. Sales methods are direct selling and distribution. Direct selling can grasp the terminal of the market, and distribution can face more demand groups.
Generally speaking, the company's business model is very common, with no bright spots, but it is relatively perfect and mature. In this typical "small company and big industry", whether this business model can bring sustainable economic benefits to the company is the most critical. The industry gives 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.
(B) Core competitiveness
1, specificity
2.R&D capability
In June 2009, the company's waterproof technology research institute was approved as the "national recognized enterprise technology center", which is the first national enterprise technology center in the domestic waterproof industry and the only national key laboratory of waterproof materials for buildings with special functions.
The above picture shows the R&D expenses of all companies in the waterproof material industry in the past 65,438+00 years. Among them, the main business of the first four companies is not waterproof materials, only a small part is involved. What really matches the business of Oriental Yuhong Company is Keshun. It can be seen that Oriental Yuhong's investment in R&D capability far exceeds that of other companies, which is obviously the embodiment 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 capability has also built the company's technical barriers, and the continuous introduction of new products will make the company at the leading level in the industry.
3. Layout of production capacity
The company has established R&D bases for production and logistics 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, which ensures that the company's products radiate to the national market with lower warehousing and logistics costs, and has unparalleled competitive advantages in meeting customers' diversified product needs and national supply requirements.
Summary: Generally speaking, the company has a certain competitive advantage in the field of waterproof materials, especially the research and development ability, which is at the leading level in the industry. R&D capability actually represents this technological advantage. Maintaining this advantage can improve the production efficiency of enterprises, bring higher returns to enterprises, and meet various market demands quickly.
(3) the moat
1, yield
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 maintained at the same level, and there is no distinction between those who are superior and those who are inferior. Speaking of gross profit margin, let's take a look at the company in the past few years:
The above picture shows the gross profit margin of the company at 20 17. From the inside of the company, 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 changing trend of gross profit margin in recent ten years:
2. Proportion of income from three fees
Let's compare the three expense ratios of Keshun and the company. The first picture above shows the ratio of the three expenses of the two companies. It should be said that the difference is not very big. The proportion of the three fees of Oriental Yuhong is slightly lower than that of Keshun. After reading the specific expenses of these two companies in the past five years, it is obvious that the scale of the three expenses of Oriental Yuhong is much larger than that of Keshun. Does that mean that the income scale of Oriental Yuhong is much larger than that of Keshun?
3. Processing cost
The company is a small company in a big industry, with low industry concentration and many waterproof manufacturers. The company does not have an advantage in switching costs, and the company has not laid out industries in every corner of the country. All waterproof materials will be considered by the demander, that is to say, the waterproof material of Oriental Yuhong is not the only choice of the demander, and it is not sticky enough for users, so there is a certain conversion risk 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's brand. Yuhong brand trademark is recognized as "China well-known trademark", and it is the first "China well-known trademark" in China building waterproof material industry. In this regard, the company has a certain brand effect.
Summary: 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 solid, and the company has no absolute advantage to prevent competitors from entering this industry, and the concentration of this industry is low. The existence of many small companies may be the future competitors of the company, and these unknown risks will bring uncertainty to the future operating efficiency of the company.
Growth analysis
I have listed the ROE levels of companies involved in the waterproof industry in the past 65,438+00 years. Oriental Yuhong ranks second among these companies, but Golden Mantis's main business field is only a little in the field of architectural decoration and waterproofing, not its main business. In addition to Golden Mantis, Oriental Yuhong ranked first. Where is the company's high ROE level? We divide the fish eggs into two parts.
Return on net assets = net interest rate * total assets turnover rate * equity multiplier
1, net interest rate
Let's look at the upstream raw materials first. The price of raw materials is mainly affected by oil prices. The following figure shows the trend of crude oil price in recent 30 days and the trend of oil inventory and price change in recent years:
In 20 17, the domestic crude oil output1920,000 tons showed a downward trend for two consecutive years. In addition, China is an oil-poor country, with a large consumption of crude oil, which leads to a high dependence on foreign countries, reaching more than 65% in 17. It seems that the crude oil price will remain high in the future, so the company's material cost will remain high in a short time.
View the company's period expense history:
The company's financial expenses and sales expenses have been rising steadily in recent years, mainly due to the expansion of the company's production, and the company's financial expenses have turned around, especially 20 17, mainly the interest expenses of borrowing and issuing convertible bonds. From the perspective of the company's future strategy, the company's goal is to involve all parts of the country, so the period expenses definitely need to be increased, and the proportion of the three expenses may still fluctuate at a certain level, and the possibility of decline will not be too great.
So to sum up, starting from the cost price, the company's net interest rate has limited room for improvement.
2. Total assets turnover rate
3. Equity multiplier
Generally speaking, a company's higher rate of return on net assets is influenced by higher net interest rate, higher turnover rate of total assets and higher equity multiplier. These three indicators of the company's ROE are relatively balanced, and the company's ROE level is likely to be further improved. The most important thing is whether the net interest rate and total assets turnover rate can be further improved. However, the key to the improvement of these two indicators lies in whether the company's operating income scale can be further expanded and whether the cost can be reasonably controlled.
I have mentioned the core vocabulary of company operating income many times. In addition, the company's future revenue forecast shows that the growth rate of national infrastructure investment during the period of 20181-June is 7.3%, which is a cliff-like decline compared with the growth rate of 2 1. 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. And let's take a look at the company's revenue in the first half of 20 18:
At present, the company continues to expand its production capacity, with an annual output of 2400? Ten thousand square meters waterproof coiled material, 4? Ten thousand tons of waterproof coating, 20? Ten thousand tons of mortars and 1000? Ten thousand square meters of TPO? The projects have been put into production one after another, and the income growth rate is expected to further increase. I conservatively believe that the company's operating income will increase at a rate of 30% in the next three years. In 2020, the company's revenue scale will exceed 22.5 billion, and in the next five years, the company's revenue will be close to 40 billion, corresponding to the company's current market value of about 20 billion, which should be considered as value for money. Moreover, I only made a conservative estimate here, and the market share at this level is still very low, so I think there is still a lot of room for growth in the future.
(5) Safety analysis
1, asset-liability structure
The above picture is a screenshot of the company's 20 17 financial report. To put it simply, the company's total assets are13.3 billion, and its current assets are more than 9 billion, including more than 2 billion monetary funds, more than 4 billion accounts receivable and/kloc-0.5 billion inventory. The reserves of cash and cash equivalents are less than 3 billion. Look at the company's debt structure. The total liabilities of the company are more than 6 billion, the 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 some pressure, but does not pose a threat.
The above picture shows the trend of the company's asset-liability ratio in recent ten years. Obviously, there is an obvious turning point from 20 13 to 20 14. Due to the completion of the company's non-public offering of shares, the company's total assets increased and the company's asset-liability ratio decreased significantly. The company's asset-liability ratio has increased with the expansion of the industry and the issuance of convertible bonds in the past three years, which is within the normal range at present, but will it be affected if the subsequent companies continue to expand their production capacity and increase their market share?
Let's take a brief look at the company's capital flow first. The company's advance payment+payable is about 65.438+0.5 billion, and accounts receivable+advance payment+inventory is about 9 billion. Generally speaking, (advance payment+payable) > (receivable+advance payment+inventory) can show that an enterprise is awesome and can make money with other people's money, which reflects the bargaining power of the company to the upstream and downstream, as well as the credibility of the upstream and downstream to the company. Such a company is in a favorable 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. Accounts receivable and advances are the most, and funds will generally be withdrawn at the end of the year.
2. Capital flow
04
Company valuation
1. Standing on the future valuation
We consider the company's valuation from three aspects: first, the company's profit growth; Second, the environmental conditions of the market; Third, the importance of time.
(2) From the market environment, the current market is in a bear market state. I assume that the future market will continue to be a bear market, even more pessimistic. Then let's take a look at the PE level of the company under the pessimistic market situation over the years. In 2008, PE was about 17, and in 20 14, PE was about 65438. If calculated by 17PE, the company's 20 19 year valuation = 31.45 (17×1.85), the 2020 valuation =36.04, and the company's current share price is at/kloc-0.
(3) Many times, the reality is quite different from your expectations. Why? I think this is the essence of human nature, the irrationality of the market and the disapproval of the market, but the price will always fluctuate around the value, and with the important factor of time, the price will eventually return to the value.
2. Historical interval estimation method
The above two pictures show the trend of PE and PB in the company 10. As can be seen from this PE chart, if the PE opportunity value of the company is less than 25, the probability of profit is very high. The company's current PE= 17.7 is lower than the current opportunity value, so it can be said that it has certain investment value. In addition, from the historical chart of the company's PB, the company's current PB=3. 13 is also lower than the current opportunity value of 4. 12. Generally speaking, no matter from the perspective of PE or PB, the company has certain investment space.
In a word, the current company valuation is in a relatively cheap state, which deserves our attention.
05
Capital proposal
The reason why I analyze Oriental Yuhong is because the company's structure is very attractive to me. This is a typical "small company big industry" situation. Small companies refer to the leading enterprises in the sub-sectors, and Oriental Yuhong is the leading enterprise in the sub-sectors of building waterproof materials. Big industry refers to the infrastructure industry. Infrastructure industries include housing construction, high-speed railways, expressways, urban roads and bridges, subways and urban tracks, airports and water conservancy facilities. These fields all involve the use of waterproof materials, and it is normal for this waterproof industry to make minor repairs for five years and overhaul for 10 years. You can imagine how big this market is.
Most people pay attention to some rising targets, and rarely pay attention to those that fall deeply. In fact, the beginning of a wave of market is to start from the invisible, then look down (thinking it is only a small rebound), then don't understand, and finally can't catch up. When most people say that the bull market is coming, the chase is over. So human nature is like this, and it is magnified clearly in investment. In fact, many times what we earn is human money. When human nature is extremely high, it is time to trade.
At present, the company's market share is about110. In recent three years, the growth rate of operating income has kept rising steadily, with normal operating conditions, normal cash flow and relatively healthy financial data, which is one of the most important reasons for my analysis of this enterprise. At present, the company's market value is about 20 billion, and its share price has fallen by more than half from a high level. Personally, I think this investment is worthwhile now. So from the perspective of value, I think we can consider opening a position.
Any investment opinions or suggestions in this paper are for reference only. The stock market is risky, so you need to be cautious when entering the market.