The company's DC motor output ranks fourth in the industry, and large and medium-sized AC motor output ranks 14th in the industry. The company is mainly engaged in the design, production, sales and service of large and medium-sized AC and DC motor products, and provides test power system integration solutions for mechanical and electrical manufacturers, testing and scientific research institutions. The main products include large and medium-sized DC motors, medium and high voltage asynchronous motors, synchronous motors, marine propulsion motors, mine hoist motors, wind generators, turbogenerators, impulse generators and explosion-proof motors. In the first half of 2014, the company achieved operating income of 176 million yuan, of which DC motor income was 71 million yuan, accounting for 40.31%, which is still the company's largest source of income; AC motor income is 0.49 yuan, accounting for 27.84%; the rest is power system, generator and other business income.
According to the statistics of the small and medium-sized Motor Branch of China Electrical Appliance Industry Association, in 2013, the company's DC motor output ranked fourth in the industry backbone enterprises, and large and medium-sized AC high voltage motor output ranked 14th in the industry backbone enterprises. The company's main competitors are Shanghai Electric, Harbin Electric, Xiangdian shares and other large state-owned enterprises.
Most of the downstream customers belong to cyclical industries, and the growth rate of corporate income is greatly affected by macroeconomic, but the profitability is more stable. The company's products are widely used in metallurgy, power, building materials, mining and papermaking and other industries, in which the metallurgical industry is the main sales field, and the company's large and medium-sized DC motors rank among the top three in the market share of the metallurgical industry. The company's revenue from the metallurgical industry accounted for about 40 per cent of the company's total revenue in 2011-2013; it fell to 25.76 per cent in the first half of 2014, but still ranked first.
At present, the trend of domestic economic growth slowdown is clear, and some downstream industries of the company have overcapacity. As a result, the company's revenue declined slightly in 2012 from a year earlier, rebounded slightly in 2013, and remained basically flat in the first half of this year. Due to the high technical barriers of large and medium-sized motors, the company's profitability remains stable as a whole, and the comprehensive gross profit margin fluctuated between 34.68% and 36.96% in the past four years, reflecting the company's strong bargaining power.
Ac motor is the mainstream of development at present, and the growth rate of the industry is stable in recent years. According to the statistics of the small and medium-sized Motor Branch of the China Electrical Appliance Industry Association in 2013, the output of DC motors was 5.061 million kilowatts, a decrease of 1.069 million kilowatts, or 17.44%, compared with the same period last year. DC motors only account for 2.93% of the total motor output of backbone enterprises, and have a tendency to be gradually replaced by AC motors. However, DC motor still has a significant competitive advantage in some application fields of metallurgy and mining, and will not be completely replaced.
The development of AC motor basically represents the overall situation of the industry. According to the relevant data of the National Bureau of Statistics, the total output of AC motors in China increased from 62.6327 million kilowatts / year to 279.146 million kilowatts / year from 2001 to 2013, with an annual compound growth rate of 13.26%. From the second half of 2008 to 2009, due to the impact of the international financial crisis, the physical volume and benefit indicators of motors declined compared with the same period last year, and recovered in 2010. The output of AC motors in 2012 increased by 5.0235 million kilowatts, or 1.99%, over 2011. In 2013, production increased by 22.234 million kilowatts over the same period last year, an increase of 8.65%, showing a steady growth trend.
The company will focus on the development of high-efficiency motors and new energy motors in the future, and the business is expected to maintain stable growth. The company entered the wind power industry in 2007, Sinovel in recent years is one of the company's main customers. The degree of wind power development in China is relatively low. With the gradual relief of the problems of abandoning wind power, limiting power and connecting to the grid, the wind power industry has warmed up in 2013. In 2013, the installed capacity of wind power in China increased by 24% over 2012, and it is expected that it will continue to maintain rapid growth in the future.
In the field of high-efficiency and energy-saving motors, China has increased the promotion speed since 2008. In 2011, the State Council issued the "Twelfth five-year Plan" comprehensive work plan for energy saving and emission reduction. It is proposed that by 2015, the operating efficiency of the motor system will be increased by 2-3 percentage points. Compared with developed countries in Europe and the United States, the promotion of high-efficiency and energy-saving motors in China started relatively late. At present, the market share of high-efficiency and energy-saving motors is less than 3%, and the overall operating efficiency of the motor system is about 20% lower than that of developed countries. High-efficiency and energy-saving motor will be the future development trend of the motor industry.
The company has decided to take new energy motors and high-efficiency energy-saving motors as the focus of the development of future products and technologies, and is expected to achieve stable growth in the process of economic restructuring in China.
The investment direction and benefit expectation of the raised funds. The company intends to raise about 267 million yuan to invest in three projects: "large and medium-sized high-efficiency energy-saving motor production base construction", "large-scale motor transformation" and "large and medium-sized high-efficiency energy-saving motor R & D center construction". Among them, large and medium-sized high-efficiency and energy-saving motor projects will eventually form a production capacity of 1.9 million kilowatts per year, and large motor transformation projects can increase production capacity by 500000 kilowatts per year. The company's current production capacity is about 1.7 million kilowatts / year, and the construction period of the above two expansion projects is planned to reach production within two or four years. After the project reaches production, the company expects to add 590 million yuan in main business income and 92.28 million yuan in net profit every year.
Profit forecasting and pricing. We expect the company's operating income from 2014 to 2015 to be 399 million yuan and 439 million yuan respectively, and its net profit to be 70 million yuan and 78 million yuan respectively. After issuing 20 million new shares, the fully diluted EPS is 0.88 yuan and 0.98 yuan, and the net profit growth rate is 17.02% and 11.85% respectively.
In the CSRC industry classification, the company belongs to the electrical machinery and equipment manufacturing industry. according to the calculation of the CSRC Index on July 16, the average static P / E ratio of the industry in the most recent month is 27.58 times, and the average static P / E ratio of the last year is 25.87 times. In the A-share market, comparable companies are trading at a price-to-earnings ratio of 25 to 32 times 2014 earnings, with an average of 29 times, according to WIND consensus expectations. We give the company 25-30 times PE in 2014, and the market price range is expected to be 21.88-26.26 yuan.
If calculated according to the amount of capital to be raised by the company, the minimum issue price to be raised in full is about 14.89 yuan per share.
Risk hint. The macroeconomic boom continues to decline; the company's high-efficiency motor market expansion is not as expected.