Matter: Tiancheng Holdings issued a preliminary announcement on the non-public offering of shares on the evening of December 10, intending to raise 4.68 billion yuan, of which 2.67 billion yuan was subscribed by major shareholders.
Peace viewpoint:
The reserve industry M & A funds, increase the size of the three major industrial layout: in recent years, the company relies on the abundant resources of the major shareholder Galaxy Group, and is actively guided by the upgrading of policy, market and industrial structure. we will make every effort to create a diversified industrial layout with high-end equipment manufacturing, finance and resource and energy development as the core. The formation of diversified industrial layout depends on continuous capital investment as a support, through mergers and acquisitions to participate in the integration of high-quality resources can effectively accelerate the achievement of the company's goals. The company raised 4.68 billion yuan in this non-public offering, of which the repayment of bank loans is no more than 700 million yuan, and the rest will be used to supplement liquidity. The funds raised by this non-public offering will effectively meet the needs of industrial mergers and acquisitions. In the future, the company is expected to launch capital operations for the above-mentioned industries one after another, and create a diversified industrial pattern with manufacturing, finance and energy as the core.
Medium and high voltage steadily upward, smart city third-party payment rapid penetration: the company's traditional main business is electrical equipment manufacturing, in the high voltage field of on-load tap-changer sales ranked third in the world, the second domestic market share. Considering that the existing high-and medium-voltage market competition is sufficient, the market share and business scale of the company's main products are becoming more and more stable. In the future, the company will focus on the research and development of tap-changers with voltage levels above 220 kV, and strive to actively expand into the UHV field. The company acquired a 100% stake in Guohua Huiyin in November 2013, has a third-party payment license, and built it into a national mobile payment and P2P Internet financial platform by means of capital increase, as a starting point for the financial industry. at present, it has been involved in the construction of smart city digital service platform in Zunyi, Linfen, Baoding and other cities. In the ascendant upsurge of smart city construction, the company's Internet financial business is expected to be accelerated across the country.
With the growth of China's strategic emerging industries, the demand for rare metals such as molybdenum, nickel, zirconium and titanium is increasing rapidly. in recent years, the company has successively integrated many molybdenum-nickel ore resources in Guizhou Province, and formally entered the field of African zirconium-titanium resource development through asset exchange in January 2014. In the future, the company will focus on the field of resources and energy, actively promote the construction of zirconium-titanium production and processing base in Mozambique, deeply develop zirconium-titanium resources in the region, and continue to expand into this field through self-construction, mergers and acquisitions. We believe that the increase of major shareholders demonstrates confidence in the development prospects of the company and the non-public offering fund-raising investment project, and the full support of the controlling shareholders will contribute to the implementation of the company's long-term strategic decision. The successful issue of this increase is expected to write a new chapter in the global extension of the company's resources and energy development field.
Profit forecast and investment advice: without considering the thickening performance of the company's future mergers and acquisitions, the company's EPS is expected to be 0.02,0.06 and 0.16 yuan in 14-16 years, corresponding to the closing price PE of 784.0, 248.6 and 98.1 times, respectively. We are optimistic about the broad growth expectations brought about by the company's diversified industrial layout, covering it for the first time and giving it a "recommended" rating.
Risk tips: 1) the extension expansion is not as expected; 2) the risk of overseas policy fluctuations.