Superstar Technology: Xiangcai Securities Holdings

Superstar Technology is a leading enterprise in China's hardware hand tools industry. The company is the largest hand tool supplier in Asia and Europe for many large-scale hand tool product sellers. In recent years, it has been the first in the industry in the hand tool industry's sales and export value indicators. The company's products are mainly exported to overseas markets such as Europe and North America. Most of its major customers are world-renowned building materials and department store supermarket chains.

The demand for the global hand tools market has grown steadily, and China has gradually become a major hardware product producing region. The annual growth rate of global hand tools and related accessories during the period from 2001 to 2010 was approximately 4.6%, and the sales volume in 2010 was approximately US$20 billion. The hardware products of developed countries have gradually developed into high-end and mid-range products, and low-grade hardware products have gradually been transferred to developing countries. China has gradually become a major hardware product producing region.

Superstar Technology focuses on direct sales of hand tools, with channels as its core competitiveness and design capabilities as the foundation for development. The company's current products are mainly exported. The developed regions in Europe and America are the company's major markets, of which the United States accounts for 70%, and Europe accounts for 20%. After years of cooperation, Superstar Technology has established a solid partnership with large foreign retailers, and the company has a wide range of hardware products that can provide one-stop shopping services for retailers. The company has strong design capabilities and can meet the new design needs of most international customers and adapt to the needs of the international hand tool market.

The natural growth of exports, the promotion of domestic trade, and the acquisition of outgrowth are the main driving forces for the growth of the company's performance. The company's natural growth rate in recent years is around 30%. The company's domestic market development mainly through: 1, boutiques; 2, hardware chain stores; 3, the traditional distribution methods. In terms of acquisition and outsourcing growth, the company invested in Hong Kong to set up a wholly-owned subsidiary, Hong Kong Superstar International Limited, to acquire international hand tool brands and related channels.

profit prediction. We forecast the company's EPS for the 10 years, 11 years, and 12 years to be 1.21 yuan, 1.59 yuan, and 2.05 yuan respectively. Based on the price of 32.26 yuan on August 19, the corresponding PE is 26.6X/20.2X/15.7X. Considering the company's performance growth rate is clear, we give a “buy” rating with a target price of 41 yuan.

investment risk. The risk of major raw material price fluctuations and the risk of a global recession again.