Superstar Technology (002444): Looking at the growth potential of superstars from the history of TTI development
Reviewing the development history of TTI, three perspectives on the potential of superstars to become international giants TTI is a global leading power tool company headquartered in Hong Kong. Since its establishment in 1985, it has been able to integrate and develop in more than 30 years.Under the strong independent internal research and development, 南京桑拿论坛 we have developed from a small OEM company with only one Guangdong production base to a leading developer in production and operation.
We believe that the re-examination of TTI from the perspectives of strategy, finance, and estimation provides some inspiration for Juxing Technology’s development prospects. Juxing actively builds its layout, continues to strengthen its own brand and independent research and development, and transforms global tool service providers.The development strategy is expected to replicate the rise of TTI. Profitability and ROE may be steadily improved in the process, and it is estimated that the potential for improvement cannot be ignored.
The company is expected to have EPS 0 in 2019-21.
17 yuan, “Buy” rating.
Strategic perspective: Mergers and acquisitions + independent 武汉桑拿 research and development enhanced endogenous growth is an efficient way to create a leader From the perspective of corporate strategy, the key to TTI’s success lies in: 1) the acquisition of Ryobi, Homelite, Milwaukee, AEG, DreBo, Stiletto,Empire and other well-known overseas brands and businesses have achieved multi-grade, full-category layouts, forming a production, research and development focus with China, Southeast Asia, North America, and Europe, and a global marketing network; 2) Lithium-ion technology in the past decade has gradually matured to make electricThe main tools of the tool have shifted from the traditional corded type to miniaturization, light weight, and cordless. TTI accurately grasps the industry trend and continues to increase the research and development of cordless tool technology and products. New products account for more than about an area increase each year.The industry’s lowest clarity standard has already been researched and developed, and the R & D advantages of large-scale enterprises have made the company’s endogenous growth faster than the industry and improved.
Financial perspective: The continuous improvement of profitability is the key to TTI becoming a large U.S. stock. The superstar’s potential is far-reaching. Since 2010, it has been the “golden decade” of TTI’s leap in market value (the market value has increased by about 7 times).
From the perspective of 18 years, the income has grown steadily (composite growth rate of 9%), and the net interest rate has continued to increase from 3% to 8% (complex growth rate of net profit has reached 25%). The overall stability of PE assessment is the direct financial reason for it to become a large U.S. stockROE’s continuous increase from 9% to 18% is mainly driven by the net profit margin, and essentially benefits from the increase in gross profit margin (the introduction of new products with high gross profit margin year by year, optimizing product structure and production efficiency).
About TTI, since 2011, the superstar’s gross profit margins have been redistributed but the net interest rate is higher (increasing expense ratio), and the ROE is lower (due to the leverage ratio, the asset turnover ratio has been relatively reduced).
We believe that the introduction of European and American domestic services + Asian manufacturing + Chinese management R & D will advance the global development strategy, and the superstar profit margin and ROE can increase the potential.
Estimation angle: In the new stage of continuous development, it is estimated that the superstar will increase space, and maintain the “buy” ranking leader. The positive factors such as steady cash flow, continuous improvement in net interest rate and ROE provide strong support for TTI estimation. 2010?
The average value of PE-TTM in 19 years, the median is 21 respectively.
0 times, less fluctuation after 2012.
We believe that in the short term, the superstar PE is estimated to be at a historically high level, the trade friction is gradually eased, the market risk is expected to improve, and the company can replace the space for repair. In the long term, the transformation of the superstar development strategy is gradually realized, and the TTI estimates the architecture or the company.The value judgment is of reference significance.
It is expected that the company’s net profit attributable to mothers in 2019-21 will be 9.
600 million, PE is 14, 12, 11 times.
Comparable company PE 11 times in 2020, taking into account the company’s sustainable business sustainable industry, given 14-16 times PE in 2020, target price 14.
Risk reminders: economic growth in major overseas markets, exchange rate risks, less-than-expected progress in the start-up of Southeast Asian foundations, increased trade friction between China and the United States, and less-than-expected acquisition integration and investment synergy.