Main points of investment:
Toy veterans open new shoots. Over the past 20 years, the company has focused on the development of baby toys, electric cars, strollers and other products, which is a traditional labor-intensive industry. With the impact of factors such as the economic situation at home and abroad, rising raw materials and labor costs, the company's profit margins have been constantly squeezed. In the past 15 years, the company acquired Sanzhou nuclear power and entered the nuclear power and military fields.
Nuclear grade main pipeline market leader. Sangzhou Nuclear Power is the largest second-generation and second-generation improved main pipeline supplier of nuclear power in China, with a market share of more than 50%. It has been successfully used in Lingao, Hongyan River, Fuqing and other large domestic nuclear power plants. Sangzhou Nuclear Energy and the General Institute of Iron and Steel have jointly developed the centrifugal casting technology of the third-generation main pipeline, creating the hollow tube technology and generating the third-generation nuclear power market. At the same time, the company is also the only qualified supplier of domestic military main pipelines, supplying main pipelines for surface ships, submarines, missiles and other nuclear-related facilities.
Nuclear power & military business is very flexible. In 2014, the company's nuclear power and military business revenue accounted for 41% of the main revenue, and gross profit accounted for 80%. It is expected that with the restart of nuclear power and the release of military orders, the proportion of revenue will reach 70%, which is more flexible. As a leader in subdivision of nuclear power equipment, the company relies on existing technology and channels for product expansion, such as nuclear components, forgings, pipe components, etc., revenue or super-main pipeline business.
The order volume, the growth certainty is high. According to the approval of 6-8 units per year in China and the export of 2 units overseas during the 13th five-year Plan period, the annual installed scale is about 8-10Gw. At present, the demand for nuclear-grade main pipeline of one million nuclear power units is about 200 million, and the total market size is about 10-1.4 billion. The company is in an obvious dominant position, with a market share of 50%. Compared with less than 100 million nuclear power revenue in 14 years, it has a huge growth. The former major shareholder of Sangzhou Nuclear Power has promised that the net profit for 2016-2018 will not be less than 121 million yuan, 193 million yuan and 282 million yuan respectively, and the performance is expected to exceed expectations.
China Nuclear Power Institute, China National Nuclear Power Co., Ltd., CGN and others are involved in the increase. The company issued a pre-plan for issuing shares to purchase assets and raise supporting funds on January 6, with a plan to issue 176 million shares to Sanzhou Special Management, China Nuclear Power Institute and Huaxia Life Insurance at a price of 9.09 yuan per share. At the same time, 68 million shares were issued to Sanzhou Special Management and Zhongguang Nuclear Capital at the price of 11.97 yuan per share to raise 814 million supporting funds. China Nuclear Power Institute, China National Nuclear Power Institute and CGN Capital are subsidiaries of CNNC, CNNC and CGN respectively, all of them participate in the fixed increase and have a lock-up period of 36 months, demonstrating their confidence in the development of the company.
Profit forecast and rating. After the completion of the merger and acquisition, the profit statement can greatly increase EPS, at the same time, as the market leader of nuclear power equipment segment, the market capitalization is small, the flexibility is large, and the future performance will develop rapidly. It is estimated that the company's EPS from 2015 to 2017 will be 0.09,0.26,0.46 yuan. The company acquired high-quality assets, but because the acquisition is not over, it is uncertain and will not be rated for the time being.
Risk hint. The installation of nuclear power was lower than expected, overseas market expansion was not smooth, and the acquisition failed.