Origen (002701) company comment: Reignwood shares in Origen to deepen core customer strategic coordination

Origen (002701) company comment: Reignwood shares in Origen to deepen core customer strategic coordination

Event: On August 14, the company received a notification letter from the controlling shareholder Shanghai Yuanlong Investment Holdings (Group) Co., Ltd. (hereinafter referred to as “Shanghai Yuanlong”), and Shanghai Yuanlong made a large-scale reduction of 2472 unrestricted shares on that day.

60,000 shares, reducing the average price of 4.

37 yuan, accounting for 1 of the company’s total share capital.

05%, the transferee is Reignwood Aviation Group Co., Ltd.

  The shareholder structure was optimized and the core customer strategy was further deepened.

The company has always been the main supplier of China Red Bull. As of 2018, the company’s top five customers have established a proportion of 71 in total revenue.

46%, the largest customer (China Red Bull) accounted for 59.

10% (According to the company’s acquisition of Boer Asia Pacific, Red Bull is expected to reduce its share of total revenue to about 45%), and the company’s share of China’s Red Bull tank purchase is still about 95%.

Based on the company’s “follow-up” service and other outstanding service capabilities and long-term cooperation, the company’s three-piece can gross margin has remained above 35% over the years, and its profitability has clearly led the industry.

This time, Reignwood Aviation Group Co., Ltd. transferred the controlling shareholder’s shares to further deepen the strategic cooperative relationship with equity.

  Shanghai Yuanlong reduced its stake in the company from 44.

46% canceled 43.

41%, will not cause a change in control.

  The production and sales of China Red Bull are dazzling, and the expected pattern is clear.

According to the sales announcement of Reignwood FMCG Group’s mid-year meeting, 19H1 achieved functional beverage category 147.

2 trillion, the same increase of 3.

7% of which Red Bull 138.

900 million, 上海夜网论坛 Steed Plasma 8.

US $ 300 million, an increase of 47%. We expect Red Bull’s sales growth rate to remain stable at around 10% in 19/20. The three-piece can business is a core business segment with stable and profitable companies and high barriers.

On the evening of May 30, the Beijing No. 1 Intermediate People’s Court ruled that the application for “compulsory liquidation of Chinese Red Bull” by Thai Red Bull was rejected.

China Red Bull’s industrial chain covers millions of employed people such as packaging, transportation, and sales. It has been rooted in China for more than 20 years, and it has become clear that it will not accept Thai liquidation applications.

  The two-piece can industry is trending upwards, and leading companies are expected to benefit first.

With the acquisition of Boer ‘s Asia-Pacific two-piece can leader, the company will become the first supplier of Budweiser beer, Tsingtao beer and Yanjing beer metal packaging. The market share of the “Origen-Boer-COFCO” system can reach 37%about.
The two-piece tank industry experienced an unbalanced supply and demand after 14-15 years of concentrated production capacity expansion. After 15 years, the expansion of production capacity returned to rationality, the acceleration of small and medium-sized production capacity accelerated, and the merger and integration of large and medium-sized can manufacturing plants accelerated.Substantial price increases are expected to continue in the next 20 years, and the capacity of two-piece cans has entered a long-term upward channel.

  Profit forecast and investment recommendations: Based on the stable production and sales of three-piece cans and the volume of two-piece cans, the price increase is reasonable, and we expect the company’s total operating income for 2019-2021 to be 111.

01/142.

88/178.

8.8 billion yuan, net profit attributable to mother is 9.

08/11.

31/14.

49 trillion, 0 for EPS.

39/0.

48/0.

62 yuan, the current sustainable corresponding PE is 11.

9X, 9.

6X, 7.

5x, maintain “Buy” rating.

  Risk warning: The price of raw materials has risen sharply, and major food safety risks.