报告名称：Eastern Pioneer Driving School(603377)IPO Enquiry Report：Enjoying advantages in
报告类型：新股定价
报告日期：2016-01-27
研究机构：中信国际
股票名称：东方时尚
股票代码：603377
页数：4
简介：Investment Highlights:
Company profile: a leading driver training services provider with a26% market share in Beijing. Incorporated in 2005, the Company had5,401 employees and 3,193 vehicles for driver training purposes as of3Q15. Through the provision of quality services over years, theCompany has gradually established its superior brand image andboosted its market share in Beijing to 25.54% with nearly 240k traineesenrolled in 2014. The Company derives 99% of its operating revenuefrom driver training services. Its posted revenue and net profit ofRmb660mn and Rmb270mn for 1H15 respectively (revenue CAGR of37% for 2011-14).
Industry development: scale expansion and asset integrationpushing up the market concentration. Driver training represents aconsumer service segment on the automotive industry chain. Itsupstream is the nearly perfectly competitive auto manufacturing anddealership market, which grants the training enterprises with hugedemand a greater bargaining power in auto purchase; and thedownstream is the extremely scattered personal consumers, whichendows the companies with premium service and brand image agreater pricing power. Looking into the future, we believe the size ofthe Chinese driver training market will rise to Rmb250bn by 2020,given (a) the per capita auto ownership (0.09 unit) is still significantlylower than the global average (0.16 unit) despite fast growth in theoverall auto ownership (CAGR = 15%) over the past decade, (b) thenumber of new drivers logged a CAGR of ~16% during 2009~14, and(c) the per capita training expense continued to increase.
Competitive advantages: vertical and horizontal expansion, brandadvantage. 1) Horizontal expansion: the Company’s market share inBeijing has risen to 26% with a 23% CAGR for the enrolled traineesduring 2012~14, and it further expands its influence in the North Chinavia the Shijiazhuang subsidiary. Additionally, the Company is buildingpresence in Yunnan, Chongqing and Hubei to tap the vast potential inthe central and western regions. We expect its business volume to riseswiftly over the upcoming years. 2) Vertical expansion: the Companyis transitioning from a driver training services provider to a provider ofcomprehensive auto consumer services. At the moment, it hasextended its foothold to the auto repair and motor insurance agentfields; 3) word-of-mouth marketing accounts for an increasing share of the Company’s new trainee resources (the ratio hit nearly 50% in 2015), and the rising brand recognitionwarrants a solid pricing power over consumers.
Projects financed with IPO proceeds: to tamp down strength in Beijing market and support expansioninto new cities. The Company intends to raise Rmb820mn in proceeds from the IPO project, which will beused to expand its business scale and improve its service quality in the Beijing market (Rmb410mn) aswell as speed up the business expansion in Shijiazhuang (Rmb120mn) and Hubei (Rmb290mn). Thisstands to drive ahead the Companyˇs cross-regional expansion, improve its service chain, and upgradeits training capacity, service quality and brand power.
Risks: Reform of the driver training services model, volatilities of the fuel prices; decline in the number oftrainees, and slower-than-expected construction and operation of the projects financed by IPO proceeds.
Recommend an enquiry price of Rmb17.33. We forecast the Companyˇs net profit attributable toshareholders in 2015-17E to be Rmb332mn/358mn/374mn, equivalent to fully diluted 2015-17E EPS ofRmb0.79/0.85/0.89. We adopt the absolute valuation method in our forecast, as the Company is the first(to-be-) listed driver training school in Chinese A-share market. Based on DCF valuation and oursensitivity analysis, we believe the fair price range for the stock is between Rmb17.2-20.4. Hence, werecommend an IPO enquiry price of Rmb17.33, translating into 20.4x 2016E P/E.

下载地址：Eastern Pioneer Driving School(603377)IPO Enquiry Report：Enjoying advantages in