New Century Cruise: the three major risks of the first share of luxury cruise ship

Reporter Shong SME market is about to enter the "first luxury cruise stock"-Chongqing New Century cruise Ship Co., Ltd. (002588). February 21, the New Century cruise ship purchase.　　The company's prospectus shows that it is proposed to issue 15 million shares, accounting for 25.21% of total equity after issuance. Public information shows that founded in 2002, the new Century cruise ship's main business for the Yangtze River foreign luxury cruise ship operations and travel agency business, the Yangtze River has been the next generation of Century series "Star of the Century", "The Emperor of the Century", "Century Glory" number, "Century Diamond" and "Century Gem" Five-star luxury cruise ship. According to the prospectus disclosed in the last three years of the main financial data, the company 2007-2009 operating income of 161 million yuan, 144 million yuan, 183 million yuan, the owner of the parent company's net profit is 26.1458 million yuan, 21.1449 million yuan, 23.096 million yuan,　　The basic earnings per share are 0.59 yuan, 0.48 yuan and 0.52 yuan respectively.　　However, after many days of this reporter in-depth interview, financial analysts pointed out that "luxury cruise ship first" still has a lot of risks, which is much higher than the tourism industry average price/earnings ratio of the issue, the disclosure of the use of funds and operating costs of the three major risk factors, particularly deserving investors and regulators concerned　　81 times times P/E, IPO buyers face a break risk of 30 yuan/share of the market price, corresponding to the issue of 81.08 times times earnings. This reporter looked at a number of securities research institutions on the new Century cruise company's research report, found that the company's IPO price and the issuance of a P/E ratio is significantly higher than the average target in the industry.　　At present, the tourism industry key companies 2011 average price-earnings ratio of about 33 times times, and overall at 25-45 times.　　Zhongyuan Securities Research Institute researcher Chen Shanshan in its published research report, said the company is expected to 2010-2012 EPS for 0.77 Yuan, 0.80 yuan and 1.00 yuan, combined with tourism plate valuation, reasonable p/e ratio of about 30-35 times.　　China Merchants Securities Research and Development center Lin Zhouyong wrote a report of 2011 pe30-40 Times, a reasonable valuation interval of 19.5 yuan-26 yuan.　　Combined with the data, the new century cruise ship is 81 times times more than 2-3 times the value of the Research institute and the industry average. Many investors said in the forum: "Only 5 cruise ships, sent to such a high price, obviously want to circle money." To this, this reporter interviewed the company financial Director and board Secretary Zhu Yin. "We are the first listed company in the luxury cruise industry and we are unique, and the profitability is obvious and there is a lot of room for growth," he said. "February 18, the New Century cruise ship IPO Roadshow, chairman and general manager Peng Jianhu said the company in the process of investment in the construction of cruise ship, in accordance with the" Product qualityLeading "concept, and fully absorb the advanced experience of European river cruise, actively carry out product innovation, repeatedly broken the domestic Yangtze river cruise tradition, has accumulated more advanced investment in the construction of ship experience, domestic other cruise enterprises within a short period of time can not imitate and beyond, in a leading position. However, according to this newspaper, the new century cruise ship is not the leading company in the luxury cruise industry.　　The Yangtze River in the management of foreign-related luxury cruise ship company mainly has the Yangtze River overseas, Dongjiang industry, among them, the 2009 market share of the highest is Dongjiang industrial, accounted for 28.5%, the new century cruise accounted for 22.28%, ranked second, again is the Yangtze River overseas, accounting for 15.81%.　　The public disclosure of the use of funds is not detailed, nearly 300 million yuan funds did not disclose the use of the new century cruise ship to raise funds will reach 450 million yuan. The use of this open fund-raising, the new century cruise ship prospectus disclosed that the collection of funds mainly into the "century series" foreign-related luxury cruise ship new projects in the next two years to build two five-star standard luxury cruise, to invest 176.19 million yuan, the project implementation cycle plan for 24 months　　If the funds are not raised, the company will use its own funds and bank loans, and if the funds raised exceed the funds used in the project, it will be used to replenish the company's liquidity.　　Sun Xihua, an analyst at a large foreign finance company based in Beijing, China, told reporters according to the past situation of China's capital market, the high price and price-earnings ratio, 15 million shares of the new century cruise stock, is a very small stock, must be able to issue, raise the expected funds is also very easy. But he pointed out that the new century cruise to investors publicly disclosed the use of funds, the specific project funds accounted for only 450 million yuan to raise funds less than half. "Every fund that is publicly raised must be open and the regulatory authorities have strict rules that disclose the use of the first public offerings." "Nearly 300 million yuan in public fund-raising to supplement the company's liquidity, most investors in the open forum on this question," The New century cruise ship before the listing of the financial situation may be a problem, the debt rate is also very high, the company previously existed in the short run.　　"Most of the financial people and investors say the new century cruise ship is likely to be used to repay bank debt."　　In this respect, Zhu Yin admits that the company has a long-standing problem of short BI, the company brought greater financial pressure and risk, the company to take measures to control the overall level of indebtedness, and actively seek the support of financial institutions to improve the company's debt structure. "After the listing, this situation will be completely changed." "Zhu Yin said.　　But he was interviewed by reporters, did not clearly tell this newspaper nearly 300 million yuan for the specific use of funds, only vaguely said the company has a five-year strategic plan. When the reporter repeatedly asked the fund specific use of the situation, Zhu Yin said because the company listed during the body too tired, unwilling to say more, have questions to check the prospectus. But this reporter has viewed more than 320 pagesProspectus, also did not find the specific use of funds. Oil prices, labor costs rise, future profitability worry about oil prices, wages, is the largest cost of transport.　　The new century cruise, which has the characteristics of the transport industry, will undoubtedly increase operating costs by sharply rising oil prices and workers ' costs.　　Zhu Yin told our correspondent, Fuel is the new century cruise ship's largest cost, accounting for more than 20% of the total cost, followed by labor costs, accounted for more than 10%. In the prospectus, the new century cruise also mentions the risk of fluctuating fuel prices: "Fuel costs are one of the main costs of cruise operations, and the cost of fuel in the company's reporting period accounts for about 36% per cent of the operating costs of cruise ship operations." The fluctuation of fuel price will lead to the change of shipping cost, and the profit of the company will fluctuate, although the company can make up the price of ticket, but also be restricted by the market environment. "China Merchants Securities research report that there are more constraints to improve performance: 1. As the overall carrying capacity of the industry is only 50%, the market competition is still more intense, in this case, the overall fare increase is not very likely; 2. The overall capacity of the company has been higher, is expected to exceed 85% 2010　　Such a high occupancy rate has been difficult to increase the space; 3. Labor, fuel costs rising pressure. From the global luxury cruise market, "The cruise ship is difficult to operate, throughout the global cruise market, only the leading carnival profit level is fair."　　"China Merchants Securities Research report said. Business single is also one of the factors that make the new century cruise ship's profitability worrying. The company is mainly engaged in Inland River luxury cruise ship operations and travel agency business, in which cruise ship operations are the main source of revenue.　　The company currently has 5 large luxury cruise ships, the main routes covering the middle and lower reaches of the Yangtze River, of which, Chongqing to Yichang route is the company's main products, accounting for more than 85% of the company's business.　　According to the company's revenue composition in recent years, the contribution of cruise ship operations is basically around 60%, and the contribution to gross margin is between 80% and 90%, which is the most important source of income and profit. However, there are also research reports that: the Yangtze River, and even the whole country, cruise ship market is in a rapid development period.　　Although the current cruise market is still mainly concentrated in Europe and America, however, China is rapidly rising, international cruise giants have increased the development of China's market; 2005-2009, the Yangtze River cruise to receive domestic tourists compound growth rate of 30%, but compared with the Danube, the Nile, the Yangtze River cruise market is still in its infancy, the development of a large space.　　Financial analysts advise investors to pay attention to the risks of the company's business model, and the new century cruise ship's overseas underwriting business revenue accounted for the last three years of decline. Its financial report reflects: underwriting business income accounted for the share of cruise business revenue since 2009 has been declining trend, 2007-2010 September, the issuer of the cruise ship operating business revenue accounted for the share of the business revenue of the cruise ship 61.33%, 69.09%, 38.15%, 41.32%.　　In addition, the company's actual control of the Peng Jianhu issued directly before the company held a 89.32% equity, its son Peng Junyu holding 10% of the company, the total holding of 99.32% of the company, in an absolute holding position, after the release of the listing completed, Peng Jianhu and its children total holding the company 74.28% Equity, still in absolute holding position