This report is read as follows:
Coal prices stabilized in the short term to facilitate good performance recovery, participated in the manufacturing of aero-engine components to promote transformation, and raised the target price by 10 yuan.
Main points of investment:
Coal prices stabilized in the short term to increase profits, the transformation of emerging to build a long-term road. Considering the winter coal season approaching, port, power plant inventory replenishment needs, coal prices are expected to usher in short-term support, which will help the company's stable performance, we raised the company's 2015 / 16 EPS to 0.12,0.11 yuan (the original 0.08,0.10 yuan). In addition, considering the layout of the company in high-end consumption, aviation manufacturing, health care and other emerging fields, relying on extension to accelerate development, and referring to the average valuation level of the transitional industry, the company was given 83 times PE, in 15 years to raise its target price to 10 yuan (original 7.50 yuan) and maintain its overweight rating.
Replenish inventory during the peak season to start temporarily stabilizing coal prices, and acquire Simpson to enhance the layout of yachts. The daily coal consumption data of thermal power has significantly improved, while the inventory of core power plants and ports has dropped to a low level, and downstream replenishment inventory demand may stabilize coal prices in stages. In addition, China Securities Network reported that Shenhua recently cancelled coal sales concessions to ensure short-term stability of coal prices. We believe that the stabilization of coal price Q4 will help the company recover its profits. In addition, the company's acquisition of 60% of Simpson (10% of the first phase) is another sublimation of St. Lorenzo, a pre-associated high-end yacht customizer, to enter the yacht industry. With the rich sales resources of Simpson Yacht Co., Ltd. (14 years of revenue of HK $322 million), it is the sole agent of St. Lorenzo in the Asia-Pacific region to promote the growth of the company's yacht business.
Focus on high-end aviation manufacturing and set up a medical merger and acquisition fund. The company is engaged in aviation manufacturing in cooperation with the Aviation Department of China, including a stake of 10% in CAAC Hanzhong Aviation parts Company to develop aircraft manufacturing and spare parts production; and 45% investment to set up AVIC New Dazhou Company to provide Leap engine parts, the company has signed 25 parts supply with Snecma, the first delivery has been completed on December 11, 12 pieces are to be delivered, and 3-5 trial products are subject to acceptance. According to the plan, the company is expected to produce the parts in 16 years, when the performance is expected to increase. In addition, the medical merger and acquisition fund set up by the company is also in operation, actively seeking high-quality targets for the company's transformation of the medical health road.
Risk hint: coal prices continue to decline and the progress of medical transformation is lower than expected