Incident: The company announced an additional issuance plan. The total amount of capital raised (including issuance fees) is not more than 1 billion yuan, and the maximum number of new shares to be issued is 86 million shares. The actual controller of the company, Mr. Jia Quanchen, subscribes for no less than 10% of the actual number of shares issued, and the net amount of capital raised after deducting the issuance fee is to be invested in the first phase (2*65MW) project of the Sulawesi Industrial Park project in Indonesia. Comment: Investing in power plants is a key part of achieving the layout of Indonesia's entire industrial chain. In recent years, the company has been adjusting its existing industrial layout and actively promoting investment in Indonesia. It already has high-quality local resources such as coal mines, docks, nickel mines, and manganese ores. While building a nickel-iron industrial park, it has introduced a nickel-iron factory to drive the export of the company's electric power supporting equipment and smelting equipment. In 2014, the company's overseas revenue reached 454 million yuan, accounting for 67.79% of revenue, and the initial layout has been achieved. Although Indonesia is rich in nickel ore and coal resources, the resources cannot be converted into products due to lack of electricity. In particular, in early 2014, Indonesia “banned the export of raw ore.” China's nickel ore resources are particularly scarce. 70% need to be imported, of which more than 50% are imported to Indonesia, so it is inevitable that factories will be built there after Indonesia's ban on mining. In February 2014, the company launched the Sulawesi Industrial Park project in Indonesia. Currently, the industrial park has introduced three companies to invest in the construction of nickel-iron production lines, so there is an urgent need for the company to build supporting facilities as soon as possible, especially power plants. Investment in the early construction of the power plant led the company to export power equipment. After completion, in addition to supplying electricity to its own smelter, it can also sell electricity abroad, and the profit margin is huge. The economic benefits of building power plants are remarkable. The power generation project had a static investment of 1,544 billion yuan, with a unit investment of 1,1874 yuan/kW; the dynamic investment of the power generation project was 1,605 billion yuan, with a unit investment of 12,349 yuan/kW; the estimated total return on investment was 18.81%, the net return on capital was 43.92%, and the investor's internal return on investment was 20.64%. The additional issuance does not change the company's control. Prior to this offering, Mr. Jia Quanchen and his co-actors held a total of 101 million shares of the company, accounting for 33.52% of the total share capital. The maximum number of additional shares issued this time is 86 million, and Jia Quanchen's subscription number is no less than 10% of the actual number of shares issued. Therefore, after the issuance is completed, the total shareholding ratio of Mr. Jia Quanchen (including those acting in concert) will not be less than 30%, which will not cause a change in the company's control. The Indonesian sector (coal, machinery and equipment) has realized huge profits. In 2014, the company's performance came largely from contributions from the Indonesian sector: coal production and marketing business and complete mechanical equipment business. The coal production and marketing business (Indonesia) achieved revenue of 227 million yuan, exceeding the company's revenue for the full year of 2013, accounting for 33.89% of total revenue; the complete machinery and equipment business achieved revenue of 283 million yuan, accounting for 42.17% of total revenue. In terms of gross profit, the original power quality optimization and waste heat and pressure utilization sector declined slightly from year to year. The total gross profit of the two new sectors, coal sales and complete mechanical equipment, reached 169 million yuan, while the company's total gross profit for the same period last year was only 62.614,300 yuan, which had a very obvious effect on improving overall performance. It can be seen that the Indonesian sector has become a new growth point for the company. Maintain a “buy” investment rating. The company will rely on the Indonesian Sulawesi Nickel-Iron Industrial Park project to integrate mineral resources and power plant resources, and use local superior resources - coal and nickel ore to build a complete nickel industry chain; at the same time, the company will use the Indonesian Industrial Park project as a starting point to develop an overseas direct sales market for power equipment, and the company's performance will continue to grow rapidly: 1. The company's power equipment business will benefit from increased investment in high-speed rail and rail transit; 2. Indonesia's mining ban will reduce domestic laterite nickel ore prices, which will create an advantage for the company's costs; 3. While driving the company's electricity equipment exports, the company can also invest in Indonesia Local power shortage enterprises provide supporting power equipment. Based on the company's performance and project progress, we expect the company's 2015-2016 EPS to be 0.96 yuan and 1.98 yuan respectively. Combined with the average valuation level of the nickel sector, we gave the company a target price of 19.14 yuan, corresponding to 20 times PE in 2015, maintaining a “buy” rating. Risk warning. Policy risk; project delivery risk; exchange rate fluctuation risk; business integration risk.