Revenue and net profit decreased, while newly signed orders increased. During the reporting period, the company achieved revenue of 816 million yuan, down 4.6% from the same period last year; net profit belonging to listed shareholders was 48.55 million yuan, down 15.9% from the same period last year; EPS was 0.14 yuan, down 17.6% from the same period last year; and the weighted average rate of return fell by 0.60% to 2.76%. The company signed a new order of 953 million yuan in 2015, up 5.3% from the same period last year. Q1-Q4 revenue grew 9.8%, 22.2%, 6.0%, 1.1%, 11.0%, 50.5%, 68.7% and 65.1%, respectively. We judge that the company's performance inflection point is coming.

With the adjustment of the product structure, the concrete pipe has dropped sharply. The company's revenue from concrete pipes reached 416 million yuan, down 27.0% from the same period last year, while newly signed orders totaled 434 million yuan, down 22.4% from the same period last year. At present, the concrete pipe industry has overcapacity and fierce competition. The company's concrete pipe sales have fallen by 27.5%, the price is flat, the average cost has risen by 6.0%, and the gross profit margin has dropped by 3.4% to 33.1%. We judge that it is difficult for the concrete pipe industry to have great growth in the past 16 years, and the company's orders are affected by the supply and demand of the industry; at the same time, the average annual contract amount of the North Hubei project is 321 million yuan in 16-17 years, which plays a stable role in the performance of the concrete plate.

The performance of plastic pipes has improved and the prices of raw materials have dropped. During the reporting period, the company's plastic pipe revenue was 400 million yuan, up 40.1% from the same period last year, and the newly signed order was 5.02%, up 45.1% from the same period last year. With the adjustment of the company's business, the sales of plastic pipes increased by 72.9% and the inventory decreased by 33.5%. Affected by the decline in raw materials and energy prices, the average price of plastic pipes decreased by 19.0%, the unit cost decreased by 24.6%, and the gross profit margin increased by 5.2% to 29.8%. We believe that plastic pipe has the advantages of short cycle and high technical content over concrete pipe, and the cost advantage appears in the downward range of energy price. combined with the order situation of the company, there will still be rapid development in 16-17 years. it will be one of the main sources of growth and profits for the company in the future.

The northwest bibcock carries on the pluralistic layout, and is optimistic about the construction of water conservancy and water affairs and pipe corridor. The company is one of the leading enterprises of water supply and drainage pipelines in Northwest China. During the reporting period, it continues to consolidate its regional position and actively expand water resources development and pollution control, and promote intelligent water conservancy and water services business. According to the completion of the 12th five-year Plan and the 13th five-year Plan, we judge that there are more opportunities for projects with a scale similar to the water resources allocation project in northern Hubei; the market space for underground pipe corridors is about 300 billion yuan, which is beneficial to the leading enterprises in the industry. therefore, the company's layout in water and pipe corridor construction will consolidate the company's industry position and boost growth.

Profit forecast and valuation: from 2016 to 2018, the EPS of the company is expected to be 0.170.19pm 0.22 yuan, corresponding to PE of 60-52-45 times. The company is the leader of the management industry in the northwest region, with good asset quality, and maintains a "buy" rating, taking into account the market expectations of the water conservancy industry and underground pipe corridors and the company's orders.

Risk tips: raw material price fluctuations, new business development is not up to expectations, industry competition intensifies, and so on.