New Hope: Replicable success can touch growth

Investment logic companies are restructuring their assets. After the completion of the reorganization, six and the group's main profit accounted for about 70% of the company. We believe that the new hope of investing at the present point is largely the investment of six and the future growth of the group.　　And six and the group can continue to big Shandong market and can replicate the success of off-site is our recommendation here the basic logic of New hope. The company is the industry leader and integrator, growth to power. Company feed business in Shandong's market share of 46%, the national market share of 7.2%, is the largest feed production enterprises.　　With the advantages of scale and cost advantages, the company's feed business in the past average annual growth rate of up to 40%, significantly higher than 7.7% of the industry average, increasing market share, is the industry leader and integrator. can continue to enlarge the Shandong market. The average sales radius of the feed product is 150-200 km. Because of the restriction of sales radius and raw material resources, the competitors from Shandong region enter Shandong market more cost than the company, thus building the entry barrier to the market.　　We believe that the company is currently in the Shandong Market has formed a encirclement, by virtue of the scale and price advantages, continue to enlarge the Shandong market is just around the corner. Replication can be replicated successfully: Henan, Hebei and Liaoning and other markets and Shandong market homogeneity strong, the probability of successful replication of the Shandong model is very large. (1) Similar raw material origin and terminal market resources, advantageous to the company reproduction cost superiority and the meager profit Strategy, (2) the similar livestock breeding density and the transportation density, is advantageous to the company replication dense development strategy, (3) The low market concentration is advantageous to the company to take the scale leading advantage, (4) Henan, Hebei and Shandong three provinces border,　　Similar farming practices are conducive to corporate replication services marketing strategies. Valuation and investment proposals according to the restructuring of the company after the calculation, the company 2010-2012 net profit of 1.448 billion yuan, 1.726 billion yuan and 2.011 billion yuan, EPS for each share of 0.83 yuan, 0.99 yuan and 1.16 yuan. We believe that the company's feed business can enjoy 2011 years 35-40 times the value of PE, and the profits of the people's livelihood can enjoy 2011 Years 10 times times the value of PE.　　The company's share price is a reasonable interval of 22.57 yuan-25.10 yuan, for the first time to give "buy" investment rating. Risk (1) The company's reorganization bill has been approved by the general meeting of shareholders, the SFC has to approve, there is uncertainty. (2) Factors such as natural disasters and animal epidemics may have negative effects on the company's business.