The main points of the report.
Event description.
The company released its 2014 report on April 9, with realized revenue and attributable net profit of 802 million yuan and 17.7 million yuan respectively, up 9.41% and-5.93% year-on-year, or 14.3% per EPS0.06 per share, down 14.3% from the previous year.
Comment on the event.
The growth rate of the company's water business has improved, benefiting from the national water conservancy project plan and the "five-water co-governance" in Zhejiang Province. In 2014, the company sold 282 million tons of water and 61 million tons of sewage treatment, an increase of 12% and 14% respectively over the same period last year. At present, the national sewage prevention and control action plan based on "Water Ten articles" and the "five-water co-treatment" plan with an investment of nearly 300 billion yuan in Zhejiang Province will greatly promote the growth of water demand. At the same time, the company is actively raising funds to enhance daily water supply capacity and sewage treatment capacity. And speed up the expansion of business areas and increase engineering cooperation with local governments, so the company's water business will usher in an inflection point in 1-2 years.
Venture capital industry boom growth, equity participation in Paradise Silicon Valley ushered in the performance inflection point. The venture capital industry has directly benefited from the rapid change and expansion of the capital market, especially the registration system and the explosive growth of the new third board market will reevaluate the stock equity value of venture capital companies, while the paid-in capital of Zhejiang Paradise Silicon Valley inventory project in which the company participates in 27.9% has reached 8 billion yuan, in an industry-leading position. Silicon Valley Paradise Group is expected to list on the new third board in 2015, when there is a lot of room for revaluation of the equity value of Zhejiang Paradise Silicon Valley.
The real estate business is a drag on performance, but the company is actively coordinating the transfer. The company holds 51% of the shares in water conservancy real estate, which has suffered a large loss since 2012, with a loss of 94.77 million yuan in 2014. at present, the company is actively engaged in the transfer of the assets. after the divestiture of the assets, the company's performance will be greatly improved.
Investment suggestions: 1. The company achieved a net profit of 17.7 million yuan in 2014, showing a slight decline, mainly due to the larger losses of the subordinate real estate companies. At present, the company is actively planning for the transfer. 2. After the additional issuance, the company's water business will expand rapidly and its profitability will continue to improve. The company's water supply and sewage treatment business directly benefits from the sewage prevention and control plan promoted by the state and the five-water co-treatment plan invested heavily in Zhejiang Province, while the additional issuance significantly enhances the company's daily water supply and sewage treatment capacity. 3. The sustained high demeanor of the venture capital industry increases the market value of the company's 27.9% stake in Paradise Silicon Valley: benefiting from the registration system, the new three-board new policy, and mergers and acquisitions, the venture capital business of Paradise Silicon Valley is expanding rapidly. its stock is rich, including 6 meeting projects. with reference to the valuation of Jiuding investment, it is estimated that the 27.9% equity in Paradise Silicon Valley can reach 5.5 billion yuan in market value, superimposed with water assets, and the company's comprehensive market value can reach 9 billion yuan. With at least 50% room for improvement, it is estimated that the EPS in 2015 and 2016 will be 0.27 yuan and 0.36 yuan respectively, corresponding to 51 times and 38 times PE, maintain the recommendation!