Superstar Technology Announcement: Permission To Sell Protective Equipment In Europe And America Is Expected To Increase Profits.

On the night of March 16th, the Hangzhou superstar Polytron Technologies Inc announced that it had received the notice of the US Food and Drug Administration (FDA) recently, and the application for the product filed with the US FDA was approved. The product name is MASK and SCAVENGING ("respirator"). The validity period of the certificate is as of December 31, 2020 (according to the US FD). A stipulates that the application period for the above products is valid for the rest of the year, and may be renewed after expiration.

Following the announcement of the approval of the US Food and Drug Administration (FDA) approval mask product registration in the evening of March 16th, the Hangzhou superstar Polytron Technologies Inc (hereinafter referred to as "superstar technology") announced again today (March 17th) that the company recently received the EU CE compliance statement issued by ENTECERTIFICAZIONEMACCHINE, according to the European Union Medical devices. According to the relevant regulations, the company's protective masks have completed the registration of medical devices in the European Union.

Superstar technology said that the company's protective mask products were approved by the US FDA and the EU CE compliance statement respectively. The company will be able to sell the above products in the EU and the US market. The company is actively promoting the sale of the product in the EU and the US market, and supporting the corresponding capacity according to the order situation, and strive to bring new profit growth point to the company and ensure the company's business. Stable and sustainable development.

According to superstar technology, sales of corporate masks were less than 5 million US dollars in 2019, and did not reach 1% of the company's 2019 annual revenue. Until now, the company had no protective mask production capacity, and all masks were from outside production. Although the company had received the intention orders from the European Union customers, it had not yet signed a formal masks contract with the EU customers. The impact of company performance.

According to media reports, although the domestic epidemic is still affecting production and life, but the data have improved, while the trend of foreign countries are still grim. Statistical data released by Johns Hopkins University show that as of 8:33 Beijing time at 8:33 on March 16th, there were more than 167 thousand confirmed cases of new crown pneumonia in the world, and Europe has become the epicenter of the new crown pneumonia epidemic. According to the insiders, the demand for masks is expected to continue to be strong, especially for foreign masks.

At present, the new type of coronavirus continues to affect the national medical masks basically out of stock. To achieve antiviral effect, respirators can only be used once and increase the use and demand of respirators.

Data show that China is the world's largest producer and exporter of masks. Its annual output accounts for about 50% of the world's total. In 2018, China's mask industry had a total output of 4 billion 540 million. In 2019, China's mask production exceeded 5 billion, the output value reached 10 billion 200 million yuan, and the medical masks accounted for 54%. According to the national development and Reform Commission, the current utilization rate of masks in China has reached 110%. As of 2 February 29, the national mask has reached 110 million daily output, reaching 116 million per day, and still can not meet the needs of the public and medical staff.

At the same time, with the trend of rising epidemic in foreign countries, there are also tense demand for masks in many foreign countries. Some agencies predict that the peak of epidemics abroad will be delayed for 1-5 months than the epidemic situation in China. Judging from this, domestic and international demand is expected to remain high for some time. WHO pointed out that the demand for personal protective clothing such as masks is 100 times the normal level, and that the price is 20 times that of the normal level. Moreover, due to widespread and inappropriate use of personal protective equipment, this shortage is further aggravated. As the largest mask producer in the world, China's annual output accounts for about 50% of the world's total. In meeting domestic demand, China is expected to undertake the important task of global mask production.

Public information shows that superstar technology is the world's leading and largest hand tool industry in Asia. Its core competitiveness lies in its excellent R & D design capabilities, excellent supply chain management capabilities, continuously enhanced private brand advantages and international development advantages. The company has become one of the largest hardware suppliers in Asia, including LOWE, S, HOMEDEPOT, WALMART, BRICODEPOT, CTC and so on. Superstar technology is mainly engaged in R & D, production and sales of tools and hardware such as hand tools, hand-held electric tools and intelligent products.

According to the financial report, in 2019, superstar technology achieved 6 billion 230 million yuan of business income, and its net profit attributable to shareholders of listed companies was 937 million yuan, an increase of 5% and 30.72% over the same period last year. In the past 2015-2018 years, the composite revenue growth rate of superstar technology was 23.2%, and the compound growth rate of 17.1% in the past 6 years was significantly higher than that of its main customers such as LOWES, HOMEDEPOT and overseas counterparts, such as STANLEY Black & Decker (the world's largest hand tool and power tool enterprise), Chuang Ke industry (the rapid development of power tools and outdoor gardening tool leading enterprises). Excluding the impact of mergers and acquisitions, superstar technology endogenous growth rate also belongs to a higher level.

Zhang Cheng, an analyst with Huatai Securities, said that the production of hand tools is mostly concentrated in China, and Stanley is also a major customer of giant technology. According to the company's research, the 70%-80% of the global hand tool capacity is in China. According to Stanley19Q3EarningsConference, Stanley is expected to be affected by tariff increases in 2019 for about $125 million, accounting for 10.67% of the company's net profit of $1 billion 171 million in 2019. At the same time, Stanley is the main customer of the giant star. According to the company announcement June 22, 2019, 2019-0512018 bought 220 million hand tools to the giant star, so we can deduce that Stanley should have some capacity in China.

At present, the scale of tool manufacturers in the United States is generally small, and the manufacturing cost is much higher than that of Chinese exports, even if the tariff is increased by 25%. In Southeast Asia and South America, because of the immature supply chain, low manual efficiency and lack of automation, the tools manufacturers in Southeast Asia and South America have low capacity and high production costs, and are unable to compete with Chinese scale enterprises. Therefore, Zhang Cheng judged that the overall pattern of imported hand tool products in the United States would not change significantly. Taking into account the competitiveness, substitutability of the company's products, and many years of cooperation with customers, it is unlikely that the US customers will levy all tariffs or transfer most of them to the company. According to the company's announcement 2019-062 in August 3, 2019, the company and its main customers including the top five customers agreed on tariff issues. The parties will mainly digest the effect of tariffs on the parties by developing new products that adapt to the market and improving the market price of terminal products.

Zhang Cheng predicts that in the next three years, the revenue growth rate of the company will be higher than that of the industry, and the profit side will increase faster than the revenue side, and the main growth rate is 1. The company is expected to take the opportunity to improve the competition pattern in the trade friction, and maintain the growth rate of revenue higher than the industry in the next few years. At the same time, it will superimpose the strategy of transforming the hardware supplier from the hand tool supplier to the service provider. Category and expansion of production capacity, is expected to further increase revenue growth; 2) as transformation and upgrading is expected to gradually enhance the company's profitability, while stacking the scale effect, while taking into account the positive impact of the 2020 strategy investment income, profit growth is expected to be higher than the income side.