Shun Ye shares (002565): Strategic recovery of the main business layout of new tobacco and industrial cannabis

Shun Ye shares (002565): Strategic recovery of the main business layout of new tobacco and industrial cannabis
Key points of investment The company’s growth drivers: the recovery of the main business and the strategic layout of new tobacco and industrial cannabis. Active mergers and acquisitions, expanding the company’s industrial chain advantages.After the company went public, it used capital advantages to integrate within the industry, improve its industrial layout, and achieve its goal of covering major domestic high-end cigarette companies. The company has expanded R & D investment, new projects have been continuously expanded and the company’s performance has grown.At present, the company’s new projects include new three-dimensional self-contained environmentally friendly packaging construction projects and micro-structure optical packaging materials construction projects.New products with high technological content are continuously launched, which has become a powerful boost for the sustainable growth of the company’s business. Actively explore overseas customers and increase sources of sales revenue.The company constantly explores overseas customers and taps customer demand, and the proportion of overseas operating income has steadily increased.At present, the company has established cooperative relationships with Amcor Group, British American Tobacco, and several tobacco companies in the United Arab Emirates. Layout of new tobacco, resource integration, ready to go.In 2013, 杭州夜网论坛 the company and Dongfeng Co., Ltd. established Shanghai Lvxin Electronic Technology Company in the Shanghai Free Trade Zone to engage in the research and development and manufacturing of electronic cigarettes.In November 2018, the company’s subsidiary, Hongkong Lvxinfeng, acquired 100% equity of Cambodian cigarette maker SINO-JK, with the aim of strengthening the R & D, manufacturing and sales of non-burning new type tobacco heating cartridges. Obtained an industrial hemp cultivation license and laid out an industrial hemp business.On January 16, 2019, Yunnan Lvxin Bio-Pharmaceutical Co., Ltd., a wholly-owned subsidiary of Shunjing Co., Ltd., received planting qualifications, and received the approval of the company ‘s Zhanyi Branch of Qujing Public Security Bureau for its application for processing cannabis flowers and 杭州夜网 leaves.Shanghai Lvxin Electronic Technology Co., Ltd., a subsidiary of the company, signed a “Cooperation Agreement” with Yunnan Hansu Biotechnology Co., Ltd. and Hemp Investment Group Co., Ltd. to cooperate with each other to explore the basic materials of industrial hemp flower and leaf extraction in electronic biological health products.(Including industrial non-combustible solids derived from industrial hemp flower and leaf bases, liquid electronic atomizers and buccal tablets, etc.) market opportunities.Shanghai Lvxin and Yunnan Hansu plan to set up a joint investment to set up a company that will promote Shunyang’s future business activities in the field of industrial cannabis. Profit forecast: It is estimated that the company’s operating income will be 20 in 2018-2020.55/22.68/25.1.9 billion yuan, net profit is 1.06/1.18/1.40 ppm, with annual growth of -5.79%, 11.22% and 18.45%, the corresponding EPS is 0.14/0.16/0.18 yuan. Risk reminder: the risk of the company’s downstream cigarette industry developing sluggishly, the risk of new business development of new tobacco and industrial cannabis, and the risk of policy supervision.