Matters.
Fuxing Xiaocheng announced that it signed the "Public-Private Partnership Agreement for the purchase of Intelligent Metering equipment" with the city of Emfuleni, South Africa, and we investigated it as soon as possible.
The main point.
1. The description of the company is conservative and the profitability of the project is much higher than expected.
Project agreement: install at least 66000 single-phase smart electricity prepaid meters and 5100 three-phase smart meters and 83000 water meters and related system collection devices to realize urban water and electricity intelligent consumption, reduce loss, save energy and reduce emissions. 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.
We think: from the point of view of the operation plan, the project only needs to invest 200 million equipment capital and 100 million working capital, with a total of only 300 million. The company earned 600 million in 5 years, that is, 2.5 years to recover the principal, the next 7.5 years to share stable income, the internal rate of return is extremely high. If you add financing leverage, the return on investment is ultra-high. The company's description of the project is conservative, and the profitability of the project far exceeds expectations.
two。 There is still a lot of room for replication and the growth can be sustained.
According to the survey, there are more than 170 cities similar to E city in South Africa, which have some problems such as leakage and poor management. There is a lot of pressure for each city to pay an extra 600 million rand a year. If you cooperate with the company, not only do not need to pay more loss, but also can earn 200-400 million rand a year.
The company obtained the E city project, before and after 2 years, mainly focused on business and bidding. Time and operational experience are the biggest barriers to South African projects. At present, in addition to E City has signed a contract with the company, there are 4 cities are also preparing to sign a contract with the company. After the E city project starts, Party An only needs to issue a letter of recommendation to sign a contract with other cities directly, which greatly saves the bidding link and forms a higher barrier. It is calculated according to the annual net profit of E city after the project is stable. If all the cities are renovated, the annual loss of space will be reduced by 10 billion yuan (19 billion rand), and the space and growth will be huge! the 3.PPP model is supported by governments at home and abroad, and China's Marshall and Belt and Road have implemented smoothly.
This PPP model is in line with China's policy. It exports Chinese capital and technology, employs local workers, and is supported by overseas countries. China's Marshall and Belt and Road are the most pure targets.
4. Sharply raise the 15-16 year profit forecast.
Significantly increase 15-16 EPS to 2.56, 4.11 yuan, corresponding to PE27, 17 times, the increase is 27%, 36% respectively, high growth, replicability, strong demand, cooperative policy, once again emphasize the "push" rating! Risk hint.
The progress of overseas business is lower than expected; the talent gap caused by rapid business expansion; the risk of exchange rate fluctuations; the risk of Ebola virus spread.
