#今日读书打卡#
At present, the concentration of the downstream real estate industry is also increasing, and the proportion of hardcover houses is increasing, which puts pressure on the downward bargaining power of pipe enterprises.
Therefore, the possibility of Weixing's future price increase is very low, so the imagination space of its future business is mostly cross-regional expansion, mergers and acquisitions or multi-category collaborative development, and Weixing's actual actions (such as foreign investment) have also confirmed this trend.
Regarding this case, the financial indicators that need to be focused on in the follow-up are: revenue growth, gross profit margin (be wary of price wars), cash flow, inventory turnover and accounts receivable turnover (industry prosperity and downstream relationship), and the growth rate of operating income of waterproof materials (newly cultivated businesses should pay more attention to operating income and dilute net profit).
In addition, from the perspective of macro indicators, the growth rate of real estate investment and real estate sales area (downstream demand), crude oil prices (raw material prices), the industry concentration of real estate enterprises, and the proportion of finely decorated houses will also affect their future performance growth.
In fact, after more than 10 years of rapid development, the mainland has become the world's largest infrastructure and real estate construction market, the mainland building materials enterprises have incomparable advantages in other countries, but because the industry has been high prosperity in the past, the industry low tide period is very short, so there has been no large-scale mergers and acquisitions.
Now under the policy suppression, the most downstream real estate development enterprises concentration has been on the way, if the prosperity further downturn, it is very likely to occur mergers and acquisitions, forcing to improve the concentration of the supply side, the formation of a large world-class building materials group leader.
Risk warning: the proportion of equity pledge by major shareholders is relatively high, and the downside risk of the real estate industry.
Valuation method 1, DCF discounted valuation, considers the growth rate under three different circumstances: historical growth rate, the CAGR of Weixing New Materials in the past five years is 28.32%.
According to the data of Oriental Wealth Choice, the market consensus expects the performance growth rate to be 22.73%, 20.24% and 19.44% respectively in the next three years.
In terms of endogenous growth rate, due to the negative interest expense of Weixing New Materials, investment income and non-operating income are very small, the operating profit is estimated as EBIT, and the data in the past five years are calculated as follows:
Since the reinvestment rate is greatly affected by the post-property cycle, 2016 was the lowest, and the average expected growth rate was 11.45%.
Considering the above three different methods, the conservative growth expectation is set as: 10% in the first three years, 6% in the next three years, 3% in perpetuity, and 10% in perpetuity; The optimistic growth expectation is 25% in the first three years, 15% in the next three years, 3% in perpetuity, and a discount rate of 10%.
Weixing New Material's cash flow and net profit are growing rapidly, and the net operating cash flow is higher than the net profit.
The conservative estimate is about 16.3 billion yuan, and the optimistic estimate is 37.4 billion yuan.
At present, the market value of this case is 18.5 billion.
Valuation method 2, refer to historical PE valuation——
As of the close of trading on September 20, 2018, the market value of Weixing New Materials was 18.5 billion, corresponding to 26.2 times PE in 2017, and the current dynamic PE was 20.6 times.
Historical P/E ratios mostly fluctuate between 15-29x, with a historical average P/E ratio of around 21.8x
Valuation Method 3 – Comparable Company Method (PE)
In 2017, the static PE of China Lesso was 7.3X, and the current dynamic PE was 5.2X, Yonggao shares were 23.2X and 18.5X, and Gudi Technology was 327.4X and 33.4X, respectively.
Predict the follow-up and listen to the next breakdown
It does not constitute any investment advice, the stock market is risky, and you need to be cautious when entering the market