Xiamen Tungsten Industry: The acquisition of the Pearl River photoelectric active distribution of rare earth industry

Event: The company's holding subsidiary Changting Jinlong Rare earth Co., Ltd. intends to contribute 3.87 million U.S. dollars to acquire a 100% stake in Guangzhou Zhujiang Optoelectronic Materials Co., Ltd., owned by Mitsubishi Chemical Corp. Pure Light Analysis: 1, the company is the largest tungsten and molybdenum products production and export enterprises, to create from the tungsten mine → smelting → deep-processing complete industrial chain. Tungsten smelting products production capacity of the world's first, or the largest tungsten powder, tungsten carbide powder manufacturers and exporters, tungsten and molybdenum wire production and sales accounted for more than 60% of the country. In the first three quarters of this year, the company realized operating income of 3.905 billion yuan, an increase of 112%, attributable to the listed company shareholder net profit of 314 million yuan, earnings per share 0.46 yuan, the year-on-year increase of 820%.　　The company expects the cumulative net profit of the year to the end of the next reporting period to increase by more than 50% year-on-year. 2, in addition to the traditional tungsten industry, the company's rare earth industry chain is also improving.　　51% of the company's Longyan Rare earth Development Company has become the integrated main body of Fujian Longyan rare earths, become the local leading enterprises, is currently in the integration and resource exploration stage, has not been large-scale mining. 98.75% of the company's Fujian Changting Jinlong Rare Earth Company's 1000 tons of fluorescent powder production has been in the first quarter of 2010 commissioning, 3000 tons of NdFeB magnetic material production line is scheduled to start construction in the third quarter of 2010. The acquisition of Guangzhou Pearl River Photoelectric New Materials Co., Ltd. is mainly engaged in a variety of display fluorescent powder, semi-finished products and other kinds of fluorescent powder production and processing, belong to rare earth deep-processing, but also the Changting jinlong rare Earth Company's direct downstream, further improve the company's rare earth plate downstream industry chain.　　Although this acquisition has little impact on the company's short-term performance, it is the future profit growth point.　　3, 2011 The company's high-end carbide projects, battery materials, lithium-ion products will contribute to profitability, high-end magnetic materials in the next 2-3 years will become a growth point of performance, the real estate business in the next 3-5 years will be expected to continue to contribute to profits. 4, Simple estimates, the company 2010-2012 dynamic P/E ratio of about 74 times times, 46 times times and 39 times times, the valuation is relatively high.