The Seal Industry Leaders

Upgrade city accounted for rate is company recently development key: company currently sealed pieces products technology has basic reached and foreign leading quite level, but domestic market city accounted for rate also not to 10%, has larger upgrade space, main points has (1) further deep dug stock market: mechanical sealed usually each 1-3 years on need replaced once, phase more Yu incremental market, stock market more stable, and market space also big, yuehankelan currently incremental and stock market income proportion in 44:56 around, and company the proportion in 50 : 50 around, also has must of upgrade space; (2) layout emerging downstream, reserves future development power: company in recent years also began active layout for example nuclear power, and environmental, and military, emerging downstream field, long-term training, to timing mature of when can became company growth new power; (3) insisted light assets strategy, flexible business: company focused Yu technology and service of provides, manufacturing cost only accounted for business cost of 12% around, light assets strategy more conducive to company timely according to downstream needs adjustment products, And contribute to the future development of horizontal and vertical.

Valuation and rating: internal seals market is more fragmented, or international high-end market leading led company seals for domestic enterprises, technology import substitution, but competition is likely to affect the company's gross profit margin. Only considering the company's current products and downstream applications, we estimate that 2015-2017, the company EPS of 1.85 and 1.78, 1.79 Yuan respectively, corresponding to 49 times, 49 times and PE respectively 47 times, covered for the first time, to "overweight" rating.