CHINT Electric IPO Pricing Report: Low Voltage Appliance Industry Leader, Aiming To Capture High-End Market

Company profile: the company is the largest manufacturer of low-voltage electrical appliances in China, mainly engaged in R & D, production and sales of five types of low-voltage electrical products, such as distribution appliances, terminal electrical appliances, control appliances, power and electrical appliances, electronic and electrical appliances.

The company has made the first six consecutive sales volume in the domestic low voltage electrical appliance industry, with a sales income of about 10% in 2008.

In 2009 1-6, the main business of the company achieved 2 billion 100 million revenue and net profit of 351 million yuan.

Industry background: China is the world's fastest growing low-voltage electrical appliance market. According to the statistics of the China Electrical Equipment Industry Association, the annual composite growth rate of the domestic low-voltage electrical appliances market is over 15% in 2000-2008 years. In 2008, the sales revenue of the whole industry was about 43 billion 700 million yuan; other emerging markets such as India and Russia also maintained an average annual compound growth rate of over 10%.

Recruitment projects: (1) the annual output of 60 million sets of intelligent electrical appliances projects, the scale of investment is 596 million 580 thousand yuan, an annual output of about 2 billion 630 million yuan intelligent low voltage electrical appliances, products are widely used in power, steel, household appliances, machinery and real estate industries; (2) noach energy saving control and distribution electrical products production base construction project, the investment scale of 914 million 100 thousand yuan, the project positioning high-end, help the company to iron and steel, petrochemical, metallurgy, household electrical appliance enterprises and other large industry customer market expansion.

Competitive advantage: marketing network advantages, the company has more than 2000 dealers at all levels, basically covering the whole country, fully infiltrating the key customers in various fields; brand advantage, in China's most valuable trademark 500 strong list, "CHINT" ranks first in the low-voltage electrical appliance industry; technology advantage, the company has 174 patents, has developed more than 100 series of new products with independent intellectual property rights.

Investment recommendations: the company expects earnings per share of 0.62 yuan in 2010, giving the company a dynamic earnings ratio of 33-38 times in 2010 and a reasonable valuation of 20.46-23.56 yuan.