Event description: the company announced on September 7, 2010 that the company intends to invest in the establishment of Weihai East China Power supply Co., Ltd. (hereinafter referred to as "East China Power", tentative name), with a registered capital of 10 million yuan, all from self-raised funds.
Comments: 1. Set up subsidiaries to actively layout the solar photovoltaic industry. The main business of the proposed East China Power Company is R & D, production and sales of solar photovoltaic grid-connected inverters, off-grid inverters, power inverters; various controllers; LED power supplies; encoders; electronic ballasts; high voltage frequency converters; various energy savers; undertake various solar photovoltaic system projects; solar cells, storage batteries, chargers. There are broad prospects for the development of photovoltaic industry in the future. according to the national medium-and long-term Development Plan of Renewable Energy, the installed capacity of solar photovoltaic power generation in China will reach 2200 megawatts by 2020.
two。 Join hands with Hefei University of Technology, with superior technological research and development advantages. East China Power plans to undertake the cooperation project between Weihai Huaxing Electrical Engineering Co., Ltd., the original wholly-owned subsidiary of the company, and the Photovoltaic system Engineering Research Center of the Ministry of Education of Hefei University of Technology, continue to carry out the production and operation of key conversion equipment for photovoltaic power generation and other related electronic products. The Photovoltaic system Engineering Research Center of the Ministry of Education of Hefei University of Technology is the only national photovoltaic system research institution in China, which has been in the forefront of China and even the world in the core technology field of new energy power generation. So far, it is the only national important scientific research, achievement transformation and talent training base specializing in photovoltaic system application technology research in China. This time, together with Hefei University of Technology, the company will make use of its superior technology and R & D advantages to expand and strengthen the industrialization of photovoltaic research achievements.
3. Business diversification enhances the company's ability to resist risks. We believe that East China Power's main business undertakes the business of East China CNC's original wholly-owned subsidiary Weihai Huaxing Electric Co., Ltd., and this asset integration will enable the rapid development of Huaxing's original business. the layout photovoltaic industry uses the company's technological advantages in the field of CNC machine tools to cultivate new profit growth points, enhance the company's anti-risk ability, and lay a good foundation for the company's long-term development. On the other hand, the diversification of business also puts forward higher requirements for collaborative management and staffing between different businesses of the company.
4. Profit forecast and investment rating. The company's foray into the photovoltaic industry is in line with China's strategic direction of vigorously developing the new energy industry, and we temporarily maintain that the company's earnings per share from 2010 to 2012 are 0.56 yuan, 0.72 yuan and 0.95 yuan, respectively, according to the previous trading day's closing price, the corresponding dynamic price-to-earnings ratio is 48 times, 37 times, 28 times respectively, we downgrade the company to "neutral".
5. Risk hint. 1) the risk that orders for CNC grinders of downstream high-speed rail will decline more than expected; 2) the adverse impact of the slow progress of the private placement project. 3) Photovoltaic industry may be affected by domestic and foreign policy, market, technology and other factors.