Matters

On December 3rd, the company signed a "Public-Private Partnership Agreement on Purchasing Intelligent Metering equipment" with the Emfuleni Municipal Government of South Africa, installing at least 66000 single-phase smart electricity prepaid meters, 5100 three-phase smart meters and 83000 water meters and related system collection devices, so as to realize urban water consumption, intelligent electricity consumption, reduction of loss, energy conservation and emission reduction. After 10 years of construction and operation, and one year after the normal operation of the project, the company charges 80% of the optimized revenue and shares 20% of the revenue after cost recovery, which is similar to the loss reduction project in Ghana.

Main viewpoints

1. From electricity to water field, from Ghana to South Africa, cross-field and cross-border verification companies to expand their capabilities.

The company's previous growth was based on the ECG transmission and distribution to the Volta river power generation end, both of which are the largest transmission, distribution and power generation companies in Ghana, with a market share of more than 90 per cent. This growth lies in the expansion from Ghana to a city in South Africa, and there is the possibility of inter-city expansion in South Africa and cross-country expansion in Africa in the future.

two。 Emphasize again the most pure standard of the Marshall Plan and Belt and Road.

After meeting with the Minister of Energy of Ghana, the company executives returned home with South African President Jacob Zuma and immediately signed the South African municipal renovation project. it is enough to prove that the company executives have strong execution and expansion ability, that there is a lot of room for imagination for the future, and that the business model is formed, and that China's Marshall Plan and Belt and Road Initiative are the purest and most successful targets (expected other South African cities, Ghana energy projects, other African countries).

3. Project expansion brings high financing demand

At present, the $150 million ($450 million) project in Ghana + 600 million yuan project in South Africa has created a financing gap of 1.6 billion yuan (a total of 3.5 billion yuan). At present, the company's over-raised funds and its own funds are basically used up, and the financing gap is large. Considering that the company's asset-liability ratio is only 9% (with total assets of 1.3 billion), the company is unable to solve the funding gap by issuing bonds and has an urgent demand for secondary market financing. While the shareholding ratio of major shareholders is only 34.7% (after increasing the holdings), considering the dilution effect of additional shares, there is a certain demand for the market capitalization.

4. Transfer from balance sheet to income statement in the first quarter of 15

According to the survey, the company plans to complete 17-180000 meters for loss reduction projects at the end of the 14th year, with the installation of the first phase of photovoltaic power generation waiting for power generation, and the completion of two BT projects before and after completion. Profits will be concentrated in the first quarter of 15 years and are expected to exceed 40 million.

5. Profit forecast and investment suggestion

After the implementation of the project, it is steadily revised up, and the conservative forecast is EPS0.62, 2.01,3.03 yuan in 14-16 years, corresponding to PE110, 37, 25 times. There are performance, high growth, can be replicated, strong demand, general trend, the trend of Daniel stocks has just formed in the next few years, push!

Risk hint

1. Overseas business progress is lower than expected

two。 The rapid expansion of business brings about a shortage of talents.

3. Exchange rate fluctuation risk

4. Risk of spread of Ebola virus