Past performance review
Chuangyuan Technology is mainly engaged in environmental protection equipment and engineering, porcelain insulators, precision bearings and optical instruments. The income of Chuangyuan Technology has been hovering between 20-2.4 billion yuan in the past three years, and the net profit belonging to the parent company hovers around 3000-40 million yuan. The performance is lacklustre, with no ups and downs. But in these three years, great changes have taken place in the company's revenue structure. The proportion of sales of clean and environmentally friendly equipment and projects increased from 28% to 42%. The company's profitability has been stable and rising slightly over the years, and the decline in net profit belonging to the parent company in 2014 is mainly due to a large drop in the price of European order inventory caused by the fall in the exchange rate of the euro.
Main points of investment
All the scattered shares of Sujing Group were recovered, and Chuangyuan realized 100% holding company announcement. Suzhou Elevator Factory Co., Ltd., a wholly owned subsidiary, was transferred to 8.074% of Jiangsu Sujing Group Co., Ltd. since then, the company directly and indirectly holds 100% equity in Jiangsu Sujing. The company has started to pull back Sujing's equity since 2011, and it is not easy to implement it until now. We believe that the company insists on holding 100% of Sujing Group in order to start Sujing Group's equity reform of 11 subsidiaries.
The general trend of equity reform of Sujing Group, a subsidiary of Sujing Group, has been established, and we hope that there will be no more good things.
Sujing Group includes 11 subsidiaries, the main business includes level III biosafety laboratory (the world's highest standard), clean electronic workshop, pharmaceutical workshop, chemical and biological weapons protection, air cooling equipment, air detection and so on. Sujing Group's environmental protection equipment products are high-end technology products, ranking first among similar environmental protection enterprises in the country. Sujing Group generally controls between 49% and 51% of its subsidiaries due to historical equity incentives. This incentive measure played a good role in retaining talents at the beginning, but now it restricts the overall development of Sujing Group: business duplication between subsidiaries, competition problems, consolidated statements reflect performance and other issues.
Porcelain insulators will benefit from UHV power transmission and distribution construction, high-speed rail construction and "Belt and Road Initiative" infrastructure.
Porcelain insulator plate in 2010 integrated Suzhou electric porcelain and high-tech electric porcelain (former Fushun electric porcelain), completed the adjustment and optimization of production layout, through the reconstruction and expansion of suspension porcelain insulator production line, the development of high-end suspension product research and development, pilot test and production, positive changes have taken place in the product structure; the output of porcelain insulators has been the first in the country. As porcelain insulators have the best performance and are not easy to burst and aging, porcelain insulators are designated for UHV power transmission and distribution and high-speed railway construction. Therefore, we think that the company will be in an absolutely dominant position in the follow-up UHV construction bidding.
Cutting into the reform of state-owned enterprises, the subsidiary Suzhou bearing Factory listed the new third board, and the participating company Chuangyuan Futures listed the new third board.
The subsidiary precision bearing completed the reform of the company's shareholding system in 2013 and became one of the first companies to be listed on the "new third board"; the improvement of the internal mechanism led to a 50% year-on-year increase in the performance of Su Shaft shares in 2014. 7.79% of the company's Chuangyuan futures were also successfully listed in April 2015, which will be beneficial to the company's equity operation.
Profit forecast
In 2015, the company is expected to achieve income of 2.5 billion yuan, net profit of 115 million yuan and EPS0.29 yuan.