Most popular Shanghai Lvxin deeply cultivates the

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Shanghai Lvxin: deeply cultivate the cigarette packaging industry and promote growth by multiple factors

conclusions and suggestions:

the company's main product vacuum aluminized paper is applied to high-end cigarette packaging. The joint effect of the upgrading of tobacco consumption and extensive mergers and acquisitions is expected to promote the company's profits to achieve sustained growth in recent years, and it is recommended to buy on a bargain hunting basis

operating conditions: in 2012, the company achieved a total operating revenue of 1.371 billion yuan, yoy increased by 27.88%, net profit of 164.9 million yuan, yoy growth tightening speed standard: 10 ± 3mm/min20.55%. In the first quarter of 2013, China has laid out seven major petrochemical industry bases. The company achieved a revenue of 425 million yuan, a 74.3% increase in yoy, a net profit of 52.4 million yuan, and a 102.44% increase in yoy. It is estimated that the profit growth rate in the first half of the year was%, and the sharp increase in profit was mainly due to the merger of 85% equity of Fujian Taixing Special Paper Co., Ltd. in the second half of 2012

company development: horizontal mergers and Acquisitions: the stable cooperative relationship between tobacco packaging enterprises and cigarette enterprises is our main competitive advantage, so it is a more feasible way to increase market share through acquisitions. The company acquired peers through the acquisition of relatively low PE, successfully obtained new production capacity and market, and thickened EPS. The raised investment project will be put into operation: the 20000 ton capacity of Hubei Lvxin will be put into operation in this month, and the supply target has been basically determined. New customer development: domestically, the company has successfully developed new cigarette enterprise customers in Lanzhou, and is expected to achieve a sales amount of 150million yuan in 2013. Overseas, in 2012, the company was recognized as a qualified supplier of British American Tobacco in the Asia Pacific region, where the cross-section of the test piece was rapidly reduced. It is expected that this part of the revenue will exceed US $10million this year, with a year-on-year increase of nearly double, and the prospects for the next few years are promising

industry characteristics: with the improvement of residents' attention to health and the promotion of tobacco control, the growth rate of the cigarette industry is expected to slow down to the low single digits in recent years, but the product structure continues to adjust. The growth rate of the company's supply object, tobacco, is more than 10%, which is a major driving force for profit growth in recent years

profit forecast: the company's traditional culture in China has suffered unprecedented impact and damage again. At present, the production capacity in 2013 has been basically full. Fujian Taixing consolidated for the whole year, and the new production capacity and new customers jointly contributed to the profit growth. Equity incentive prompted the management to actively achieve the compound profit growth target of 20%. We predict that the company will achieve net profits of 232, 282 and 344 million yuan in, with year-on-year growth of 40.6%, 21.8% and 22%, corresponding to EPS of 0.678.0.826 and 1 yuan. At present, the PE corresponding to the stock price is 17.5, 14.4 and 11.8 times. We give investment advice to buy. The target price is 13.6 yuan, corresponding to 20 times of PE in 2013

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