Analysis On Investment Value Of Public Cooperation In Tobacco Industry

The tobacco industry occupies a certain position in the world economy and people’s daily lives. In China, tobacco industry and industry related suppliers have an important impact on China’s economy, especially as one major source of tax revenue, which accounted for8%of state revenue. However, the listed companies in tobacco industry and industry related suppliers are much less than railroad, oil refinery, communications industry. The major listed companies in tobacco industry and industry related suppliers are cigarette paper packaging industry. Based on this, the listed companies which already listed on the tobacco industry (mainly for the cigarette brand, cigarette paper), development status, risk factors, the continued profitability of the study, analysis of investment in the tobacco industry companies try to provide advice. This thesis first introduces the development status, risk factors, growth opportunities of cigarette paper packaging industry; then analyzes two major listed companies by using financial ratio analysis and multiples. The purpose of this thesis is to help investors to gain basic understanding of tobacco industry and industry related suppliers, especially cigarette paper packaging industry. Within a unique defensive industry, cigarette paper packaging industry may have certain value in investors’ portfolio.This thesis is divided into five chapters:Chapter One is an introduction, including the topic, scope and methodology.Chapter Two talks about the investment valuation method, including fundamental analysis discounted cash flow valuation method, ratio analysis and multiple comparisons.Chapter Three is the analysis of tobacco industry fundamentals and discussion of the characteristics of the listed companies in cigarette paper packaging industry. It contains an overview of the global tobacco industry and China tobacco industry. By analyzing the history of statistics as well as industrial policy, the writer predicts that tobacco consumption will raising in a steady rate as the income of the people raising. It contains development status, industry future trend, growth opportunities, and risks of cigarette paper packaging industry. Chapter Four is the detailed analysis of two listed cigarette paper packaging companies (Jinjia holdings002191.sz).Chapter Five summarizes some conclusions.The main points of this article are:Tobacco industry will maintain steady growth of3-4%in volume per year as the macro economy and consumers’purchasing power keep growing. In terms of the decrease of mixed, low end brand volume ratio, as middle and high end brand will enjoy higher growth rate. Leading companies in cigarette paper packaging industry will benefit from this trend by sell more upper end packaging. As inelastic as the tobacco consumption, the cigarette paper packaging industry is a weak cyclical industry, less affected by economic cycles.Reasonable view Jinjia Corporation solvency asset allocation, financial risk is small, but the values of the indicators is relatively balanced. Enlarging industry brand concentration is not high, about10enterprises above designated size, Jinjia accounted for7%of the shares of a leading position in enlarging its industry, is one of the industry standards, strong profitability. But the company’s growth is slightly less than, future growth will rely mainly on mergers and acquisitions. As in a weak cycle industry, the stock is relatively fair priced in terms of its PE and PB ratio.