A macroeconomic analysis
In 2008, China's overall economic situation is better than expected, judging from the development trend, economic operation will be in the more normal green zone, China's economy appears "overheating" and "cold" possibility are relatively small. The possibility of "overheating" and "cold" in China's economy is relatively small, favorable factors include: (1) the change of local governments, the institutional impulse to investment growth still exists. Historical data since the reform and opening up show that in the second year of government change, China's investment will appear an accelerated growth. In the performance appraisal system has not yet occurred before the fundamental change, the effect of the change of government to stimulate investment in the institutional factors still exist. This year is the opening year of the new government, we expect that the enthusiasm of the local development of the economy will remain relatively high, which will have a huge impact on investment growth. (2) Most of the industry enterprise profits increased faster, the funds in place in good condition, for the expansion of investment has laid a good foundation for capital. Despite the decline in profit growth of industrial enterprises above designated size in the first quarter, excluding four industries such as petroleum processing and electric power, profit growth in other industries (37.5%) is still accelerating, an increase of 6.1 percentage points year-on-year. In addition, the availability of investment funds in the first quarter was also relatively good, with urban fixed asset investment in place increasing by 25.2%, still maintaining a high growth rate. (3) Post-disaster repair and reconstruction of infrastructure in the southern provinces affected by the disaster will also increase the demand for new investment. (4) Entrepreneurial confidence index remains high. The results of the National Enterprise Prosperity Survey show that the entrepreneurial confidence index (140.6) in the first quarter continues to be at a high level of prosperity and is the same as in the last quarter, 56.0% of the entrepreneurs are optimistic about the overall operating conditions of their industries in 2008, and 61.1% of the entrepreneurs believe that production and operation of enterprises in 2008 will be maintained in a good condition, which indicates that most of the entrepreneurs are still full of confidence in the present and the future development of the macro-economy. full of confidence.
Second, the industry environment analysis
In 2006, the macroeconomic situation continued to be good, the income level of the population increased significantly, this stable macroeconomic conditions as the background, China's construction industry, the industry's scale of steady expansion of the production situation maintains a good momentum, the indicators hit new highs. The pace of structural adjustment in the construction industry has been accelerated, the change of production mode has been carried out gradually, and the market competition is still fierce. The total output value of the construction industry of the national construction enterprises for the whole year reached 409.75 billion yuan, an increase of 18.59% over the previous year; the completion value of 260.5123 billion yuan, an increase of 9.2%; the total profit amounted to 107.1 billion yuan, an increase of 18% over the same period of last year.
In 2006, the construction market, dominated by the construction of national key projects, urban public **** transportation and other infrastructure construction, real estate development, transportation and energy construction, modern manufacturing development, and the construction of new socialist countryside, showed vitality; the Yangtze River Delta, Pearl River Delta, the construction of the Bohai Bay region, the development of the West, and the revitalization of the northeastern industrial zone remained the most prosperous construction market; the level of production and capacity of the construction industry in developed region's strong position in the level of production and capacity of the construction industry to further consolidate and develop; large and medium-sized construction enterprises to further deepen the structural adjustment; the rapid development of the development of the foreign construction market, the market level and the scope of the region more optimized.
Investment in fixed assets in 2006 grew faster, the increase fell back. Annual social fixed asset investment of 1,098,700,000,000 yuan, an increase of 24.0% over the previous year, down 1.7 percentage points. 2006 real estate development investment of 1,938,200,000,000 yuan, an increase of 21.8% over the previous year, accelerated by 0.9 percentage points. Stable growth in fixed asset investment for the active construction industry market has laid a solid foundation for development. Overall, China's demand for products in the construction industry has been on a rising trend, especially in recent years, construction enterprises housing construction, the completed area have been growing steadily, indicating that the whole society for the demand for housing construction is growing, housing construction has a huge potential for development. And the supply situation of China's construction industry is: the total volume of growth is stable, the rate remains stable, in a period of adjustment; changes in the supply structure of the trend is reflected in the supply of infrastructure has increased, the supply of real estate development has been appropriately controlled.
The overall characteristics of economic operation in 2006 and the development trend will continue to 2007. 2007, China's economic development will still maintain a high growth rate, but the development will be more stable. 2007 stable economic development trend for the construction industry by the country's economic development cycle, is undoubtedly to provide a good environment for development.
The development of the construction industry in 2007 will still maintain a development rate of about 18%, such rapid growth to the development of the construction industry brings good prospects. However, the development of the construction industry is also facing problems such as wasteful allocation of resources and unbalanced regional development; at the same time, due to the overall upward trend of the prices of construction materials in 2007, the cost pressure increases and profit margins are further compressed.
I. Company Background Analysis
China Color Corporation, that is, the stock of China National Nonferrous Metals Construction Co.
(I) Brief analysis of operating conditions
From the financial data of the recent reporting period, the company's turnover increased substantially compared with the same period of the previous year, and the company's operating income was RMB1,777,683,000, an increase of 112.56% compared with the same period of the previous year; the company realized an operating profit of RMB429,068,000, an increase of 130.63% compared with the same period of the previous year; and the company realized a net profit of 170,000 thousand dollars, an increase of 2% compared with the same period of the previous year; and the company realized a net profit of 1.7 million thousand dollars, an increase of 2% compared with the same period of the previous year. Net profit attributable to the parent company amounted to 170,634 thousand yuan, an increase of 97.48% over the same period of the previous year.
Chifeng Zhongshi Kubo Hongye Zinc Co., Ltd. completed the basic construction and put into production, making the company's zinc metal industry chain is further improved, resource development and engineering contracting as the company's two main business, the role of the more obvious.
The Tumultin-Ovoo zinc mine in Mongolia, in which the company has a controlling stake, overcame the difficulties in climate, transportation and other aspects, ****produced 55,000 tons of zinc concentrates (dry tons), and sold 58,400 tons of zinc concentrates (dry tons), and the production situation is stable, which has brought the company a stable income.
(2) Analysis of the Company's main business
1. Content of main business and business strategy: The Company is mainly engaged in international engineering contracting, development of domestic and foreign non-ferrous metal resources mainly in aluminum and zinc, international technical contracting, international labor cooperation, import and export and other businesses. International contracting business has been the company's main business, the company's business is mainly through the export of China's non-ferrous metal industry technology, driven by the export of domestic complete sets of equipment and technical services, the company in the international market has successfully developed and implemented such projects, the export of a large number of domestic complete sets of machinery and equipment and technical services, for the company to create a better economic benefits. In recent years, according to the needs of China's economic development and changes in the market environment, the company adheres to the "going out" strategy and "resource strategy", in increasing the development of overseas engineering contracting market at the same time, take a variety of ways to develop domestic and foreign non-ferrous metal resources, and continue to accelerate the transformation from a single engineering contracting enterprise to a single enterprise. We will continue to accelerate the transformation from a single project contracting enterprise to a resource-oriented enterprise, and the project contracting and resource development businesses will promote each other and develop synergistically, and we will walk on two legs to accelerate our development. The above strategy has begun to bear fruit, and the Company has gained great development in both the engineering contracting and resource development fields.
2, the company is currently in the implementation of the project include:
● Kazakhstan electrolytic aluminum project is the company's newly signed project in 2005, is scheduled to be partially put into operation at the end of 2007, the overall completion of the project in August 2008, the project is the company's implementation of the key projects this year, the period of the report, the shipment of equipment and the construction of the site is going well, the project settlement amount is relatively large, the turnover of the project is completed. During the reporting period, the shipment of equipment and on-site construction went smoothly, and the settlement amount of the project was relatively large, with a turnover of RMB676,888,000.
● During the reporting period, the Company carried out construction and installation services under the contract for the Arak Aluminum Electrolysis Plant in Iran, and the first batch of electrolytic cells of the project was put into operation and formally put into production, which was highly praised by the owner. It is expected that the first phase of the project will be put into production within this year. During the reporting period, the turnover of this project amounted to RMB55,785,000.
● During the reporting period, the civil construction of the smelter of the Sangquan Copper Mine Project in Vietnam was basically completed, and all the equipments of the project were delivered, and it is expected that the project will be completed and put into production in the second half of the year. During the reporting period, the turnover of the project amounted to RMB19,525,000.
The general contract of Zambia kcm copper mine shaft project was signed on January 18, 2006, with a contract amount of USD37,500 thousand. During the reporting period, the project is stepping up its progress, and the on-site construction and equipment procurement work is progressing smoothly, and the turnover of the project in the first half of the year amounted to RMB53,128,000.
3. The projects for which the Company has signed contracts or agreements that have not yet been executed or become effective include:
● Iran Silwan Aluminum Electrolysis Plant Project: On March 21, 2006, the Company signed the General Contract for Engineering and Construction in Tehran with Iran Vasid Silwan Aluminum Company (the project owner). According to the contract, the Company will be responsible for the design, equipment procurement, civil construction and installation and commissioning of the 250,000 tons/year electrolytic aluminum plant in Sierbang, Iran, with a total contract value of US$998 million (please refer to the announcement published in the March 30, 2006 issue of the China Securities Journal for details). The contract has not yet come into effect. The project is a large-scale industrial project to be constructed by Saudi Western Company in Jizan City in the southeast of the Kingdom of Saudi Arabia with the support of the Saudi Government, including a wharf, a power plant, an alumina plant with an annual production capacity of 1.6 million tons and an aluminum electrolysis plant with an annual production capacity of 660,000-700,000 tons. SINOMACH will be the general contractor for the construction of the alumina plant and the aluminum plant, and SINOMACH will be the contractor for the terminal and the power plant appointed by Western Saudi Arabia Company. For details of the project, please refer to the relevant announcement published by the Company on May 25, 2007 on China Securities Journal and Juchao Information Network.
(3) The Company's own statement of operating conditions
1. Circumstances and reasons for significant changes in the profitability of the main business as compared with the same period of the previous year
Since the gross profit margin of the Kazakh Aluminum Electrolysis Project executed by the Company during the reporting period was lower than the gross profit margin of the Arak Aluminum Electrolysis Project in Iran during the same period of the previous year, the gross profit margin of the contracting business in the period of the report declined as compared with that of the same period of the previous year.
Due to the completion and commissioning of Chifeng Zhongshi Kubo Hongye Zinc Co., Ltd. during the report period, the gross profit margin of the zinc smelting business performed by the company was much lower than that of the zinc ore mining business in Mongolia, therefore, the gross profit margin of the business declined compared with that of the same period of the previous year;
Other businesses are mainly the leasing of non-ferrous buildings in China, and trading and power generation of other subsidiaries of the holding company. The increase in the gross profit margin of the trading business led to an increase in the consolidated gross profit margin of such business as compared with the same period of the previous year.
Composition of the company's profit compared with the same period last year, the proportion of investment income increased, mainly due to the period of this report, the company transferred the controlling subsidiary of the Shenzhen City Nanyou Hotel Limited all the equity interests generated by the transfer of income, while the same period last year, no transfer of equity matters.
2, the company's evaluation of its own
The company is currently in the fastest since its inception of the development of the stage, whether it is the development of resources, or contracted projects, the two main business will have a great impact on the stability of the company's operating results. The development of the company's contracted projects is progressing relatively smoothly, has signed several contracted projects or cooperation agreements, but the current non-ferrous metal resource project is only Mongolia zinc mine project, further development of resource projects on the long-term development of the company's huge impact. For this reason, the company through various ways to increase the amount of resource holdings, and where conditions permit to expand the holdings of the relevant resource varieties of the industrial chain, so that the company in the resource business has a complete and stable development trend.
In recent years, the exchange rate of RMB has been appreciating, and the export tax rebate rate has been reduced again and again, which has brought certain impact on the company's operation. The company has taken measures to cope with the basis, will further modify the project settlement currency, speed up the collection and settlement of foreign exchange, adjust the domestic and foreign procurement structure, the use of financial tools to strengthen financial management and other ways to minimize the risk of exchange rate fluctuations, at the same time, the company will continue to study the national export policy, adjust and optimize the structure of the product, and make full use of the country's preferential policies for export goods to resolve the impact of the decline in the export tax rebate rate to the company's operations, the company has taken the measures to reduce the risk of exchange rate fluctuations. At the same time, the company will continue to carefully study the national export policy, adjust and optimize the product structure, make full use of the national preferential policies for export goods, and resolve the impact of the decline in export tax rebate rate on the company.
V. Market Value Estimation
For the estimation of the intrinsic value of the stock, I am going to use the relative value model of the market price/net profit ratio model, also known as the price-earnings model. (P/E = Market Price per Share / Net Earnings per Share)
The model using the P/E stock price is as follows:
Target company's value per share = P/E x Net Earnings per Share (Dividends per Share)
The model assumes that the stock's market price is a certain multiple of the Net Earnings per Share, and that the larger the Net Earnings per Share, the greater the stock's value.
Table 7:
Share Capital Structure Number (10,000 shares) Ratio (%)
Total Share Capital 5,080,080 100
Restricted Outstanding Shares 20,983 36.1
Market Capitalization in Circulation (RMB 100 Million) 14,946
Total Market Capitalization (RMB 100 Million) 234
Latest P/E Ratio (times) 70.4
Dividend per share (yuan) 0.39
Latest P/E ratio (times) 17.7
Annual dividend yield (%) 0.3
Enterprise value-to-earnings ratio EV/EBITDA 59.65
Excerpted from Sina Stock /stock/message/sogusina/ sogu000758.htm
From the above data:
Intrinsic value per share = 70.4 × 0.39 = 27.456 (yuan)
And the current market price per share = 1494600/20983 = 71.22909,
Total market value per share = 2340000/58080 = 40.289256
Both are greater than the intrinsic value per share.
Consolidating the above analysis, the stock of China Color still has investment value in the long term and is worth investing in.
Three technical analysis
(a) k-line analysis
Color shares in April 2007 to April 2008 K chart
By the March 2007 to early May 2008 k chart, the price is clearly from the bottom of the hibernation rebound, the trend of the multi-alignment is a good time to intervene in the funds. First of all, from the market sentiment, CICC formed a very obvious big bottom on the day of April 22, 2008, and in quite some time to see, has touched the bottom, late rebound trend. Secondly, the moving averages are slowing down, gradually turning from an uptrend to horizontal, and showing signs of raising their heads towards the top. Once again, the 5-day average, 10-day average, 20-day average up through the 30-day average, and the upward trend, the formation of a clear upward channel, and at this time the buy signal is strong.
(2) KDJ indicator
KDJ indicator, also known as the indicator, it is the closing price and the highest price, the lowest price of the integrated study, through the calculation of the day or today's highest price, the lowest price and the closing price of price fluctuations of the real volatility, reflecting the strength of the price trend and the phenomenon of overbought and oversold. The following chart is the KDJ chart of the Chinese color stock from September 2007 to April 2008:
As shown, D value fell down below 20 at the beginning of April, the lowest point of 10, indicating that the stock is now in the oversold area, the possibility of the market rebound is very high, for the buy signal. J value is more down to 0, indicating that the market oversold phenomenon, and at this time, the J value of the reaction is more sensitive than the D line. From the chart, K value of 19.80, D value of 13.88, K value is greater than the value of D, indicating that the market is bullish, suggesting that a new round of uptrend will begin; and, when the value of K is gradually greater than the value of D by a small, in the graphic shows that the K line from the bottom of the upper through the D line, showing that the current trend is upward, so in the graphic of the K line breaks through upward when the D line, that is, for the signal to buy.
(C) MACD
MACD Chinese is known as the "exponential smoothing average of dissimilarity", it is a short-term (commonly used for 12 days) moving averages and long-term (commonly used for the 26-day) moving averages between the aggregation and separation of the situation, the timing of the buy and sell to make a judgment of the study of the technical indicators.
MACD technical indicators, is based on two different speeds of the smoothing average to calculate the difference between the two conditions as the basis for market research, the actual use of fast and slow moving averages convergence and separation of signs to determine the timing of buying and selling and signals, in practice, the MACD indicator not only has the bottom, to capture the function of the strong upward point, but also able to capture the selling point, to help investors successfully escape the top. The MACD indicator not only has the function of bottoming out and capturing strong rising points, but also is able to capture selling points and help investors successfully escape the top.
As shown in the chart, first of all, DIF and DEA values in April are below the 0 axis, belonging to the short market, and DIF and DEA line is upward across the 0 axis of the trend, indicating that the market in the gradual improvement of the state of affairs is clear. Secondly, the DIF line crosses the DEA line from the bottom up, indicating that the market is in an uptrend phase and should be considered for buying.
Judging by the bar line. From April, the color of the bar line has changed from green to red, indicating that the trend has turned and started to move upwards from the status; secondly, the continuous enlargement of the bar line indicates that the strength of the trend is gradually increasing.
(IV) BIAS indicator
BIAS (Behavioral Indicator) is a technical indicator that indicates the gap between the closing price of the stock price index or individual stock and the moving average for the calculation period. It is an important addition to the moving average theory. Its function is to measure the degree of deviation of the stock price from the moving average in the process of movement, so as to conclude that the stock price in the drastic movement, due to deviation from the moving trend is too far, which may result in the blocking and bouncing. The following chart shows the BIAS chart of China Color from September 2007 to April 2008:
First of all, from the form of the BIAS line, the BIAS curve at the low level of the bottom of the bottom of the w-bottom or triple bottom and other bottom reversal patterns, which may be a sign that the stock price from weak to strong, the stock is about to rebound upward, at this time for the buy signals, you can buy the shares on the low side of the absorption.
Secondly, the BIAS curve and the stock price running curve with the use of the view, the stock price curve and the BIAS curve from the low synchronized upward, indicating that the short-term stock price is expected to bottom out rebound or continue the upward trend. At this time, investors can buy low or hold stocks to rise; at the same time, this time, the BIAS curve from the bottom upward breakthrough 0 degree line, while the stock price also broke through the pressure of the short-term averages, it is shown that the stock price will be a short-term strong upward trend, investors should buy stocks in a timely manner.
Finally, from the value of the deviation rate, the 6-day deviation rate of -6.43%, indicating that the stock price oversold phenomenon, you can consider starting to buy stocks; 12-day deviation rate of -10.66%, indicating that the stock index has been oversold phenomenon, you can start to low absorption of stocks.
(E) CCI indicator
CCI indicator is based on statistical principles, the introduction of the concept of price and fixed period of the average range of stock price deviation, emphasizing the importance of the average absolute deviation of the stock price in the technical analysis of the stock market, it is a relatively unique technical analysis of the indicator. CCI indicator is designed to measure the price of the stock price whether it is outside the range of the normal distribution of the class is overbought oversold CCI indicator is specialized in measuring whether the stock price is out of the normal distribution range, belonging to the overbought and oversold category of indicators, but it has its own unique features with other overbought and oversold indicators. CCI indicator is fluctuating between positive infinity and negative infinity, so there will not be the phenomenon of indicator bluntness, which is conducive to the investor to better research and judgment of the market, especially those short-term ups and downs of the extraordinary market. The following chart shows the CCI chart of the Chinese color stock from September 2007 to April 2008:
First, judging from the CCI indicator range, the CCI indicator breaks through the -100 line from the bottom in early April and re-enters the normal range, indicating that the bottoming stage of the stock price may be over, and will enter a consolidation stage. Investors can buy stocks in small quantities at low levels.
Secondly, judging from the CCI indicator pattern, the CCI curve in April, away from the -100 line below the low level, it trend of the v-shaped bottom of the reversal pattern, indicating that the stock price from weak to strong, the stock price is about to rebound upward, you can take a small amount of low stock. And at this time the stock price curve also appeared the same pattern, more can confirm the strong trend of the stock.
Finally, from the CCI indicator trend to judge, you can see that the CCI curve in the oversold area has been running for quite a long time, in mid-April, the CCI curve breaks through -100 line down into another non-constant range, and then began to turn up, indicating that the short-term bottom of the stock price initially found that investors can a small amount of the position. The longer the CCI curve runs in the oversold zone, the more it can confirm the short-term bottom.
Consolidating the above analysis, the stock of China's color still has investment value in the long term, worth investing in.