The annual report is profitable and UHV orders are gratifying. In 2014, the company achieved income of 3.895 billion yuan, net profit of 67.7 million yuan belonging to listed companies, and earnings per share of 0.05yuan. The annual profit report is expected to be approved to take off the cap soon. The company announced that it received 2.14 billion yuan in UHV orders in 2014, accounting for 55% of the 2014 revenue, which will lay the foundation for profit improvement in 2015-16. In addition, we expect the company to get about 2.5 billion yuan of new UHV orders in 2015, which will benefit from the continuous improvement of UHV construction in the future.
The layout of "Belt and Road Initiative" has been accelerated, increasing its stake in Indian factories to 90%, and vigorously expanding the Indian market. The company announced that it will increase the shareholding of Alanta Transformer India Co., Ltd. from 51% to 90%, with a total investment of 2.95 billion rupees, totaling 295 million yuan. We believe that there is a huge demand for power construction in India, and as the second company to set up a factory in India after a special electrician, it is expected to open up a broad space for the electricity demand market of "Belt and Road Initiative" country from India in the future.
Approval of the new nuclear power plant is expected to bring incremental orders for nuclear power transformers, with obvious performance flexibility from 2016. We reiterate that as the main supplier of domestic independent brand nuclear power transformers, the company will fully benefit from the resumption of construction of domestic nuclear power plants, considering that units 5 and 6 of Hongyanhe Phase II have been approved and four more units are expected to be approved this year. The acquisition of nuclear power orders will further enhance the predictability of 2016 performance.
Asset injections are still to be expected. The Armament Group promises to solve the competition in the industry within 2 years, and Yunnan Transformers, Special Transformers and Minmetals Tianwei are expected to be injected into listed companies to further improve the layout of the company's power transmission and transformation platform.
Maintain earnings forecasts and buy ratings. It is estimated that the EPS for 15-16 years will be 0.26,0.40 yuan, we reiterate that as the core configuration target of UHV, nuclear power and "Belt and Road Initiative", the improvement trend of orders has been obvious, and the acquisition of UHV, nuclear power and overseas orders in the future is expected to form a continuous catalyst for the stock price. In addition, the company emphasizes that it is important to reduce costs and increase efficiency in 2015, and there are expectations of substantial improvement in operation.
