Investment logic.
The iron and steel industry promotes the deep integration of the two, and automation system products and technologies are the basis of transformation and upgrading. China's iron and steel industry is currently in the stage of overcapacity, and its future development will focus on improving quality and efficiency. According to the "Promotion Plan for the Deep Integration of the two modernizations of the Raw material Industry" issued by the Ministry of Industry and Information Technology in January 2015, the main content of the future development of the iron and steel industry will be the application of "Internet +" in the more mature automation system of the iron and steel industry with the application of information technology. This process can not be separated from the support of metallurgical automation products and technology.
The company has been engaged in metallurgical automation industry for many years, and the rich accumulation of products and technology has contributed to the transformation and upgrading of the iron and steel industry. Although the scale of investment in the iron and steel industry has declined in recent years, the total amount is still relatively high. We estimate that the market size of automation systems in the iron and steel industry in 2015 is 330-37 billion yuan. The company inherits the scientific research achievements of Metallurgical Automation Institute for 30 years, has strong technical strength and rich products, and has the comprehensive ability to undertake large-scale and complex automation projects. Adhering to the strategy of "based on metallurgy", the company is expected to continue to gain more market share in the field of metallurgical automation.
Actively expand the non-iron and steel field, palletizing robot project landing, expand product market space. As the company's performance is greatly affected by the iron and steel industry, the company has formulated a strategy of "expanding the application of other industries", applying products in the field of automation to light industry, construction, environmental protection and other fields. Revenue in the non-steel sector has continued to grow in recent years, gradually rising to 23 per cent in 2014. In addition, with the technical experience accumulated in the automation industry, the company has developed a fully automatic robot palletizing system to intervene in the palletizing robot application market.
The product is used in a wide range of fields, including food, beverage, medicine, chemical fertilizer and other industries. at present, projects have been implemented in Dongguan and Beijing.
Investment advice.
Considering the company's rich technical accumulation in the field of metallurgical automation, continuous business expansion in the non-iron and steel field, and the implementation of the palletizing robot project, we give it a "buy" rating.
Valuation.
We predict that the company's main business income from 2015 to 2017 will be 633 million yuan, 728 million yuan and 848 million yuan respectively, up 10.7%, 15.0% and 16.5% respectively over the same period last year, and the net profit will be 39 million yuan, 47 million yuan and 54 million yuan respectively, up 122%, 19% and 15% respectively over the same period last year.
The EPS is 0.18, 0.21 and 0.24 yuan, respectively, and the corresponding PE is two times that of 99-83-72.
Risk.
The downstream steel industry continues to be in the doldrums, the progress of transformation and upgrading is slow, and the progress in the non-iron and steel sector is not smooth.