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UBS Published Dongpeng Site Visit Report(JCN Newswire Via Acquire Media NewsEdge) Hong Kong, Oct 16, 2014 - (ACN Newswire) - As of 2012, Dongpeng Holdings Company Limited ("Dongpeng", Stock Code: 3386) was the largest ceramic tile company in China by retail sales value*, and was ranked No.1 in both China's overall ceramic tile market and high-end ceramic tile segment by market share. On 15 October 2014, UBS published its site visit report to Dongpeng and indicated Dongpeng's acquisition of Guangzhou Yinai Sanitary Products Co., Ltd. ("Innoci") in July 2014 has expanded its business in the mid to high-end bathroom product market, propelling Dongpeng's overall business growth. UBS reported that Dongpeng's brand is widely recognized in China's home decoration market and enjoys competitive advantages as the market leader. The policy shifts in China's property market (including the relaxation of home purchase restrictions and relaxation of mortgage approvals etc.) boost the property transaction volume, which could in turn increase demand for ceramic tiles and bathroom products. UBS believes Dongpeng's strategic acquisition of Innoci has brought new momentum to its expansion in the contemporary and premium design market sector. The outstanding product design capabilities and brand positioning of Innoci, combined with the production capacity, distribution and logistics advantages of Dongpeng, will propel the long-term steady development of Dongpeng's bathroom products business and create greater synergy between its ceramic tile business and bathroom products business. UBS pointed out that China's ceramic tile production market is highly fragmented. The slower growth rate of the Chinese property market is expected to speed up the consolidation of China's ceramic tile and bathroom product market. With the superior Dongpeng brand built from more than 40 years of operations, technological innovation and new product design and development capabilities as competitive edges, Dongpeng is more likely to gain larger market share in this consolidation and continue to benefit from the high demand created by urbanisation in China.UBS indicated that the projected PE of Dongpeng is only 6x (Bloomberg consensus), while the Company reported 48% YoY net profit growth in 1H2014.Appendix*These figures are based on an independent market research report commissioned by Dongpeng and prepared by Frost & Sullivan, an independent research firm, in October 2013, and statistics issued by the China Industrial Information Issuing Center for the year 2013.Copyright 2014 ACN Newswire. All rights reserved. |