Public (SZ:002009)

Company Facts

The company was known Wuxi Southern Miracle Logistic Machinery Co. Ltd, which was established in year 1997. Approved by the government of Jiansu Province, the company officially changed its name into Jiangsu Miracle Logistic System Engineering Co. Ltd. in year 2000.

Jiangsu Miracle Logistics System Engineering Co. Ltd. mainly engaged in three industries: logistic, manufacture of aero-power equipments and real estate development. Logistics business plays crucial role in bringing profits to the company at the moment while the aero-power equipment manufacture is the rising-sun industry which is encouraged by eco-friendly societies all over the world and expected to take place of current power generating modules in the future. Moreover, the company’s real estate business has also started to bring profits from the beginning of year 2008.

Jiangsu Miracle Logistics System Engineering Co. Ltd. has become the largest supplier for industrial intelligent automation system’s comprehensive solutions.  The company majors in providing automation transporting & storage system to its customers in large-scale automotive and home applicants industries.  Currently, the company’s services are the part of Toyota and Honda’s global purchasing system. Moreover, the company works closely with British FKIL Company in airports logistics world-wide, which has consistently brought contracts in the past and more contracts are likely to be signed in the future as well. Nevertheless, the company has also entered logistic markets in Malaysia, Thailand, Vietnam and India.  

With regards to the aero-power business, the company has self researched & developed bamboo composite material chord, frame, tower and nacelle. The insufficient supply of chords is considered as bottle-neck for the fast development of aero-power generation industry in China. Therefore, the company’s composite material chord has great market potential and also has outstanding competitive advantages comparing with similar products as it is cheaper, more stable and shorter in production circle. Moreover, the new project of the fiber reinforced plastic chord has also started small-scale manufacture, which is regarded as a great improvement in the field.

In terms of the company’s third business focus, real estate development, the miracle city’ project has finished its construction and started selling in the first quarter of year 2008, and the second part of the project will also start soon.

In the first quarter of year 2008, the company has achieved main business income and net profit margin of RMB 261 million and RMB 32 million separately, which count 192.7% and 246% increase separately corresponding the same period in year 2007. The fast improvements were mainly contributed by implementing orders that made in the second half of year 2007 and operating and selling of the company’s real estate.

Financial Overview:

Related Companies:

-- Holding Shareholder: Mr. Huang Weixing

-- Subsidiaries:

Wuxi Ruier Zhufeng Technology Co. Ltd.

Baicheng Miracle New Energy Equipment Co. Ltd.

Wuxi Miracle Real Estate Development Co. Ltd.

Baicheng Miracle Public Facilitates Engineering Management Co. Ltd

Changchun Miracle Automation System Engineering Co. Ltd.

Baicheng Miracle Facilities Machinery Co. Ltd.

Wuxi Chengfeng New Energy Equipment Co. Ltd.

Baicheng Miracle Aero-Power Equipment Co. Ltd.

Baicheng Miracle Casting Co. Ltd.

Anhui Tongling Miracle Lantian Machinery Equipment Co. Ltd.

-- Collaboration:

Wuxi Luoshe Comprehensive Waste-water Solution Operation Co. Ltd.

-- Invested by same investor:

Jiangsu Miracle Logistics System Engineering Shareholding Co. Ltd. (Installment Branch)

Wuxi Miracle Vehicle Frame Co. Ltd.

Jiangsu Southern Miracle Group Company

Jiangsu Southern Miracle Investment Co. Ltd.

Stock Health:

As on 8 August, 2008

Open: 11.95    High: 11.95   Low: 10.58   Close: 10.58   Vol.: 2,054,415                 

Key Stats & Ratios

     Unite: RMB 10,000 Yuan

Daily Stats (last one month):

Performance analysis:

Personally, I refer this stock as a high potential stock as the logistics and aero-power industries have great potential to grow in the near future in China mainland and the company has very well-built competitive advantages in both industries.

First of all, the company’s strategic alliances with Shanghai Electronics Co. Ltd. in chord manufacture and sales. The investors can pay attention to the progress in this project, as it is likely to stimulate the stock performance at once.  Secondly, the company has signed aero-power equipment supply agreement with German Friend Company with total amount of Euro 32 million on July 2008.

Even though, the aero-power business of the company has yet to start large-scale manufacture; thus, the time of profits contribution from aero-power equipment manufacture is rest assured. Moreover, the real estate business has been discouraged by Chinese government for macro-control purpose, which has already made loss in year 2007. I assume that the company will rather stop further investment in realty projects in order to prevent bigger loss, for sure. It is predictable that although the sales of ‘Miracle City’ will contribute profits in short term, it should not be considered as resource of the company’s sustainable growth.

In my opinion, this stock is good for middle and long term investment and the target price is RMB 21 Yuan. However, it is not yet the best time, as I assume there will be a slip in the stock price in the near future, the target buy-in price in between RMB 9.19 Yuan and RMB 10.30 Yuan.