Events:
The company issued a "notice of signing a major PPP contract with the EMFULENI government of South Africa".
Comments:
Overseas markets break through South Africa, involving the fields of water and electricity. On December 3, 2014, the company signed a "Public-Private Partnership Agreement for the purchase of Intelligent Metering equipment" with the Emfuleni Municipal Government of South Africa. According to the Agreement, the company will retrofit local electricity meters and water meters, including the installation of at least 66000 single-phase smart electricity prepaid meters and 5100 three-phase smart meters and 83123 water meters and related system collection and installation. The total amount of project contract financing is: 1097796345 South African rand (ZAR), about 600 million yuan.
The project income continues to adopt the sharing mode. The construction and operation period of the project is 10 years. After 12 months of normal operation of the project, the E city charges 20% of the optimization revenue (water and electricity revenue saved), and the company collects 80% of the optimization revenue. After reaching the break-even point of the project (the company recovers the total initial investment of 1097796345 South African rand), the E city charges 80% of the optimized income and 20% of the company's income. The method of payment is to make monthly payments for the optimized financial performance part of the contract, the two parties to the agreement reconcile monthly accounts to ensure payment to the company, and City E uses the South African rand to remit all the money to the South African bank account designated by the company.
The company model is replicated and the scale of the enterprise is constantly expanding. The breakthrough in the South African market proves that the company's cooperative operation model has been recognized by the local government of South Africa, and the company can be expected to continue to expand. The company has established good business relations with South Africa, Kenya, Togo, Sierra Leone and other African countries, laying the foundation for the company's expansion.
The company has made breakthroughs in many fields and the enterprise has entered a new period of development. In addition to the development in the field of power grid equipment, the company has entered into power generation, water supply and other fields. In the field of power generation, the company has invested in the construction of photovoltaic power plants and is signing a memorandum of understanding on the 660MW power generation project with the Volta River Authority in Ghana. In this South Africa project, the company will transform the local water meters and install at least 83123 water meters and related systems to collect and install them, and the company will enter the field of water supply.
Profit forecast and investment rating. Taking into account the project construction period and trial run period, we will not adjust the profit forecast for the time being. We forecast that the net profit of shareholders of Fuxing Xiaocheng from 2014 to 2016 will be 107 million yuan, 152 million yuan and 201 million yuan respectively, and the corresponding earnings per share will be 0.98,1.38 yuan and 1.84 yuan respectively.
Risk factors. The company's project construction schedule is not as expected; Ghana, South Africa sovereignty and single customer risk; company chip sales are not as expected; Ghana photovoltaic industry policy risk.