The company acquired 65.94% of Sichuan Aoshenda Resources Investment and Development Co., Ltd. The core asset of Sichuan Osenda Resources Investment and Development Co., Ltd. is the Yangwa Vanadium Mine Project in Shanyang County, Shaanxi Province, which holds 75% of the shareholds. mining rights have been obtained and are expected to produce benefits in 2011.
Vanadium products have been greatly adjusted by the financial crisis, and the bottoming out is expected to be stable, and they are still optimistic for a long time: the price of vanadium pentoxide rose sharply in 2008, once rising to the level of 300000 yuan / ton, and the demand for steel decreased due to the impact of the financial crisis. vanadium pentoxide fell sharply in the second half of 2008, reaching the lowest level of 80, 000 yuan / ton, close to the cost price, as the economy improved. At present, it has rebounded to about 110000 yuan / ton. We believe that with the increase in steel demand and the stabilization of steel prices, the price of vanadium products is expected to remain stable and have an upward trend in the long run.
The alum business is worth looking forward to, the future contribution profit is considerable, and the long-term potential is huge: according to the preliminary data of the Yangwa vanadium mine project in Shanyang County, Shaanxi Province, we estimate that the project 100% reaches the post-natal contribution company's earnings per share of 0.15 yuan. In addition, it should be emphasized that we assume that the price of vanadium oxide-free is relatively conservative, with the recovery of the steel industry, the future may rise higher than expected, and the revenue potential of the company's bauxite project is huge.
The power grid business will grow steadily. The power business accounts for about 80% of the company's revenue, which is the core source of the company's profits. The company's electricity sales have maintained a steady growth of about 10%, and it is difficult for spontaneous electricity to grow significantly due to the impact of power construction. The company's power plant and power grid business is mainly operated by the parent company, which basically has no other profitable assets except the profitable assets of the power plant and power grid, and the profits of the parent company can basically reflect the profit level of the company's power business. According to our simple calculation, after deducting non-recurrent profit and loss, the earnings per share of the parent company is about 0.23 yuan. Due to the limited growth of power business in the short term, the contribution income of the company's power business is about 0.23 yuan under the stable situation of incoming water.
The natural gas and tap water business may benefit from future price increases: natural gas sales and tap water are also the core sources of the company's current profits, both contributing about 0.05 yuan, and will continue to grow steadily with the development of the economy. in the future, varying degrees of revenue may be derived from price increases, but as the proportion of natural gas companies' own gas sources is only about 10%, the benefits of gas source price increases will be limited in the future.
The equity value of Huaxi Securities can not be ignored: the company holds 27.7346 million shares of Huaxi Securities, accounting for 2.74% of the equity of Huaxi Securities. Huaxi Securities achieved a profit of 1.0260939 billion yuan in 2009, 1.01 yuan per share, giving 20 times PE, the share price is about 20 yuan, and the equity value of this part is about 1.7 yuan per share.
Investment suggestion: the performance of the company's traditional business is about 0.33 yuan, taking into account its monopoly and the company's smaller equity, give 25 times PE, the valuation level is about 8.25 yuan. In addition, the company's equity stake in Huaxi Securities is roughly estimated to be worth about 1.7 yuan. The acquisition of the mining rights of the alum mine will become a bright spot for the company's profit growth in the future. with the pick-up of steel demand, it is expected that the alum mine price may also pick up, making a significant contribution to the company's performance and becoming one of the company's value points. Taking into account the current valuation of the company is not expensive, give the company "increase" investment rating, the future price of vanadium products will be one of the driving factors of the company's stock price.
Investment risk: as most of the company's power stations and other small and medium-sized hydropower stations in the region are radial power stations, there is no regulation capacity, and the power generation capacity is greatly affected by the rich and dry seasons. for example, the reserves and output of alum ore are lower than expected; at present, the company levies income tax according to 15%, which may be increased after the expiration of the western development.