Incident: The company announced the progress of some directors and supervisors to increase their holdings of the company's shares with high financing. Independent director Yao Gang increased his holdings by 2,0883,300 shares on March 17, 2015, according to the plan to increase his holdings on March 2, 2015 (0.1%-1% of the company's total share capital within 6 months), at an average price of 28.67 yuan/share, accounting for 0.69% of the company's total share capital. Yao Gang promised not to transfer his company shares during the period of the increase in holdings and for 6 months after the increase was completed. In addition, according to the “Notice on Commitments to Increase Company Shares by Executives” issued by the company on December 8, 2014 (plans to increase the company's shares by a total of 88.5 to 8.7 million shares within the next 6 months, or 0.29%-2.88% of the company's total share capital), the company received a notice on March 10. Jia Quanchen, the actual controller of the company, provided financing guarantees. The increase in holdings of the company's shares was increased through the subscription of the leading six-phase fund established by Shenzhen Huayin Jingzhi Asset Management Company. Comment: Motivating management on multiple levels. According to our statistics, in order to encourage company executives to pay attention to and participate in business management as shareholders, achieve risk sharing and benefit sharing between employees and enterprises, and promote the achievement of the company's strategic goals, and thereby share the results of enterprise development, the company is currently roughly divided into three levels: individual ownership plans for executives (Chairman Jia Quanchen, Chairman of the Supervisory Board Ying Ming, Director Jia Yulan, and Deputy General Manager Yan Dongmei), 7 senior management financing plans (General Manager Chen Xiaoqiang, Director Jia Xiaoyu, Director Mo Baixin, Deputy General Manager Zhang Zhenbo, Deputy General Manager, Director of Supervisory Board, Dashi Zhi, and Supervisory Board Zhang Peirong, financial director Liu Tao), and employees Shareholding plan (Baoying Hengshun Gongying No. 1, Supervisor Zhang Peirong and 10 other executives). The current price increase of executive leverage has been completed. This time, through senior executives who have increased their holdings in the six phase funds, they have subscribed to the fund with a total of 23 million yuan of self-raised capital, and have commissioned Guoxin Securities to sign a revenue exchange contract, with Guoxin Securities providing 46 million yuan in financing capital. Guoxin Securities is the recipient of 46 million yuan of fixed income and the payer of floating income on company stocks held during the trading period; the Leading Six Fund is the recipient of the floating income of company shares held during the trading period and the payer of fixed income of 46 million yuan, with a transaction period of 1 year. On March 17, 2015, Leading Six Fund and Guoxin Securities completed an income swap transaction, increasing their holdings of the company's shares by 2,414,200 shares, accounting for a total of 0.799% of the company's total share capital. Executives' holdings have increased by about 60%. As of March 17, 2015, the company's executives have increased their holdings of the company's shares by 15.64 million shares through various plans since the second half of 2014, corresponding to 310 million yuan. According to the upper limit of the announced plan for individual executives to increase their holdings, the company still has room to increase its holdings by 6.67 million shares, corresponding to about 190 million yuan. Increasing investment in power plants is a key part of achieving the layout of Indonesia's entire industrial chain. The company announced an additional issuance plan. It is proposed that the total amount of capital raised by the non-public offering (including issuance fees) will not exceed 1 billion yuan, and the maximum number of new shares issued will be 86 million. The actual controller of the company, Mr. Jia Quanchen, subscribes no less than 10% of the actual number of shares issued. After deducting the issuance fees, the net capital raised will be invested in the first phase of the power plant in Indonesia's Sulawesi Industrial Park project (2*65MW). In recent years, the company has been adjusting its existing industrial layout and actively promoting Indonesian investment. It already has high-quality local resources such as coal mines, wharves, nickel mines, and manganese mines in Indonesia. While building a nickel-iron industrial park, it has also introduced a nickel-iron factory to drive the company's exports of supporting power 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 and coal resources, due to lack of electricity, resources cannot be converted into products. In particular, in early 2014, Indonesia began “banning exports of raw ore.” China's nickel ore resources are particularly scarce. 70% need to be imported, of which more than 50% are imported from Indonesia, so it is inevitable that factories will be built there after Indonesia has banned mining. In February 2014, the company's Sulawesi Industrial Park project in Indonesia started. 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, especially power plants, as soon as possible. Investments in the early construction of the power plant drive the company's power equipment exports. 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 company has raised additional capital investment of 1,544 billion yuan, unit investment of 1,1874 yuan/kW for the first phase of its own power plant in Indonesia's Sulawesi Industrial Park project; dynamic investment of 1,605 million yuan, unit investment of 12349 yuan/kW; static project investment of 1543.58 million yuan. The electricity price during the operation period is 0.7 yuan/kWh. The total return on investment is estimated at 18.81%, net profit margin on capital is 43.92%, and the investor's internal rate of return is 20.64%. Additional issuance does not change the company's control. Prior to this issuance, 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 shares, and the number of shares that Jia Quanchen has subscribed is not 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 already reaped huge profits. In 2014, the significant increase in the company's performance was mainly due to the contribution of the Indonesian sector: coal production and marketing business and complete mechanical equipment business. The coal production and marketing business (Indonesia) achieved operating income of 227 million yuan, exceeding the company's operating income for the whole of 2013, accounting for 33.89% of total revenue; the complete mechanical equipment business achieved operating income of 283 million yuan, accounting for 42.17% of total operating income. In terms of gross profit, the original power quality optimization and waste heat and pressure utilization sectors declined slightly year-on-year. The total gross profit of the two new sectors of coal sales and complete machinery and equipment reached 169 million yuan, while the total gross profit of the company in the same period last year was only 62.614,300 yuan, which had an 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 Indonesia's 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 overseas direct sales markets 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 ban on mining policy has reduced domestic laterite nickel ore prices, which will create advantages for the company's costs; 3. Investment in the Indonesian Industrial Park will also drive the company's power equipment exports, and will also create advantages for the company's costs; 3. Investments in the Indonesian Industrial Park will also drive the company's power equipment exports. Local power shortage enterprises provide supporting power equipment. According to 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 38.28 yuan, corresponding to 40 times PE in 2015, maintaining the “buy” rating. Risk warning. Policy risk; project completion risk; exchange rate fluctuation risk; business integration risk.