ORG Technology(002701) 中国银河·2024-06-10 02:00Investment Rating - The report maintains a "Recommend" rating for the company [1] Core Views - The company announced a voluntary conditional general offer to acquire all issued shares of COFCO Packaging at HKD 7.21 per share, with a total cash consideration of HKD 6.066 billion [1] - Downstream demand is growing steadily, with significant room for penetration rate improvement in China's metal packaging industry [1] - If the acquisition is completed, it will improve industry competition and enhance profitability through synergies in capacity layout and customer resources [2] Industry Analysis - In 2023, China's metal packaging industry achieved main business revenue of RMB 150.562 billion, accounting for about 13.05% of the overall packaging industry, with significant growth potential compared to the global level of 45-50% [1] - The beer canning rate in China is around 30% as of 2022, significantly lower than 65% in developed countries like the US and UK, and nearly 90% in Japan [1] - COFCO Packaging is a leading player in China's metal packaging industry, serving major clients like AB InBev, Coca-Cola, and Snow Beer [2] Market Share and Competition - In the two-piece can market, the company holds a 20% market share, while COFCO Packaging holds 17% [2] - The acquisition is expected to significantly increase market concentration in both two-piece and three-piece can markets, optimizing the industry's competitive landscape [2] Financial Projections - The company is expected to achieve basic EPS of RMB 0.38, 0.42, and 0.46 in 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 12X, 10X, and 10X [4] - Total operating income is projected to grow from RMB 13.842 billion in 2023 to RMB 17.579 billion in 2026 [5] - Net profit attributable to the parent company is expected to increase from RMB 774.53 million in 2023 to RMB 1.180 billion in 2026 [5] Financial Ratios - The gross margin is expected to improve from 15.24% in 2023 to 16.22% in 2026 [9] - ROE is projected to increase from 8.87% in 2023 to 11.06% in 2026 [9] - The asset-liability ratio is expected to decrease from 45.66% in 2023 to 41.40% in 2026 [9]