Based on building intelligence, quickly realize great intelligence and national layout. With building intelligence as the forerunner and endogenous extension, the company has gradually expanded its business layout to market segments such as rail transit, railway, water conservancy intelligence, marine intelligence, smart grid, electronic power supply, and so on. the regional layout has entered 12 provinces in the four major regions of the country, and the proportion of external income in South China reached 34% in 2013. Building intelligence / grid intelligence / electronic power supply / urban rail intelligence / marine intelligence accounts for 22.6% of our projected 14-year income, respectively, accounting for 35.6% of our projected income.
The acquisition of Jin Hongwei entered the smart grid market, and Jin Hongwei deducted the non-return net profit to account for 58.3% of the 14-16 year return net profit. 51.5% of the net profit, 51.5% and 44.1%. The company announced on February 25th that it acquired Shenzhen Jin Hongwei wholly through cash and fixed increment, with a transaction amount of 990 million yuan, officially entering the smart grid, electronic power supply and other fields. According to the agreement, Jin Hongwei promised on 2014-15-16 to deduct the non-return net profit of RMB 7800 / 100 million respectively. We judge that similar expansion will boost the company's cross-domain development.
The smart market is in the ascendant and will reach 1.2 trillion in 2018. The promotion of new urbanization and the upgrading of consumption have promoted the continuous increase in the proportion of intelligent buildings. At the same time, the intelligent system is gradually infiltrated in rail transit, railway water conservancy, electronic power grid and other new fields, and the continuous growth is expected. We estimate that by 2014, the market size of building intelligence / rail transit intelligence / railway intelligence / water conservancy intelligence / smart grid will reach 10600, 150 and 350, 400 / 45 billion respectively, and the total size of smart market in 2018-18 will be 14%. The pattern of "large industries and small companies" in the construction intelligence market remains unchanged, the industry concentration is low, and the market share of leading companies is far from reaching the ceiling.
Deep ploughing of traditional business, layout of emerging areas, industrial chain extension and national layout drive sustained high growth. The company has established a certain competitive advantage in brand, qualification, technology, performance and other aspects, and the subdivided fields have ushered in the harvest period one after another. Hefei Base and Qianhai Wisdom City Company are expected to bring incremental orders in 14 years. In view of the fact that the company has invited tenders for tracking projects such as Guangzhou, Shenzhen and Hefei, the growth rate of rail transit business is expected to double in 14 years. Super high-level, complex and other building intelligence business will grow rapidly; if Jin Hongwei is not taken into account in 14 years, the company's endogenous growth will reach 88%. The smart grid and marine intelligence brought about by epitaxial expansion will contribute considerable increments.
Risk factors: M & An integration risk, industry policy risk, payback risk and so on.
Profit forecast and valuation. It is predicted that the 14-16-year net profit of the company is 1.34 pound 1.75 / 227 million yuan, the corresponding 2014/15/16EPS is 0.44 pound 0.57 yuan, and the 14-16-year net profit CAGR is 97.57%. Considering that the company is in the stage of great-leap-forward growth and the level of industry valuation, we think it is more reasonable to give the company 40 times PE in 14 years, corresponding to the target price of 17.60 yuan. The current price is 9.13 yuan, giving a "buy" rating for the first time.
