Zhongyeda: Robust distributor of electrical products

Zhongyeda, a leading distributor of electrical products in China, is engaged in the distribution of medium- and low-voltage electrical appliances and industrial control products. The customers are mainly medium- and low-voltage switchgear factories and industrial and mining enterprises. As a leading distributor in China, sales channels are the core of the company. The company currently only represents a few well-known brands of products, business capabilities have been recognized by ABB, Schneider and other first-class suppliers, is its most important distributor in the country. Many domestic SMEs want to enter the company's channels. Since the listing, the company has accelerated the pace of expansion of channels, while actively improving the business model, and strive to build a full range of agents.

The electrical distribution industry has a stable growth space Due to the diversity, complexity and wide application of industrial electrical products, product manufacturers cannot meet the individual needs of customers from all walks of life. Therefore, they must be distributed by professional distributors through product distribution. , Warehousing and logistics, system integration and complete manufacturing and other aspects to meet the diverse needs of end customers. The downstream industries of low- and medium-voltage electrical equipment distribution cover railways, industries, real estate, and other fields. The development of the industry is shifting. Therefore, the degree of prosperity of the distribution industry is highly related to the overall macroeconomic situation and it is developed by a single industry. Situation Less Impact Investment Recommendations and Ratings The growth of company performance results from the expansion of sales networks and the endogenous growth of mature networks. After the IPO, the number of newly-built regional subsidiaries increased, mainly reflecting performance in 2012. To calculate the potential for split-off and endogenous growth, we forecast the company's 2011 and 2012 earnings per share to be 0.81 yuan and 1.08 yuan, respectively, and the current price-to-earnings ratio is 24 times and 18 times respectively. Relative to the company's major downstream customers, the company's valuation is relatively low, in addition, in the current more complex economic environment, the company's external growth next year is relatively clear, weak market environment, the stable varieties will be subject to funding preferences, give "buy "In" rating, target price of 27 yuan.