The leading enterprises of cement waste heat have experienced a decline in income and profit for two consecutive years.
The company is the leading enterprise in the waste heat power generation industry. From 2011 to 2013, the main business income is 13.3,12.0 and 1.06 billion yuan respectively, and the net profit is 2.2,1.4 and 90 million yuan respectively. While the main business income and net profit decline, the gross profit margin and net profit margin also decline. The main reason is that the demand for waste heat power generation has declined year-on-year in the downstream market such as cement due to sluggish demand and overcapacity.
The original downstream demand is sluggish, and we look forward to transforming the market and overseas markets.
The lower reaches of the company are mainly cement, building materials and other industries, of which the cement industry accounts for more than 70% of the income. We expect the average annual market capacity in the next 3 years to be 80, with a corresponding market space of 4 billion yuan. we expect that the company's future order growth will come from the cement transformation market, non-cement market and foreign market. Among them, the application space of waste heat power generation technology in glass, new building materials, iron and steel and other industries is large, but it is also subject to the deterioration of business conditions and overcapacity and other problems, the release of downstream demand is slow. Foreign market income is mainly concentrated in Central and South Asia and other countries, and it is expected that there is still room for improvement in the future.
It plans to raise 80 million shares and 251 million yuan for the construction of the operation project.
The company plans to issue 80 million shares to raise 251 million yuan for the establishment of Wuhan Institute equipment manufacturing R & D base project, Wuhai Xishui BOOT project and so on. The company's existing business is still based on the EPC model (more than 60%). After the listing is completed in the future, the financing capacity will be improved, so that we can participate more in BOOT, EMC and other models, and improve the financial strength and business development ability.
It is suggested that the inquiry range is 3.25-4.01 yuan
Assuming the issuance of 80 million additional shares, the EPS of the company in 2014-16 is expected to be 0.26,0.30,0.34 yuan respectively. The company is the industry leader in cement waste heat power generation in China, and its future growth will depend on cement transformation, foreign markets and iron and steel markets. with the gradual release of the above market demand and the increase of the company's operating projects, the company's performance in the next few years is expected to reverse the downward trend and turn to steady growth, giving the company 15-20 times PE in 2014, while considering a discount of 10-15% for new shares.
Risk hint
The operating situation of cement and other downstream industries has further deteriorated; the profit of operating projects is lower than expected.