The company won the bid for 95.8 million yuan of porcelain insulators for Zalut-Qingzhou UHV project.
The company announced that it became the recommended candidate for winning bid for package 4 in the 2016 centralized bidding of insulators for the State Grid Corporation's Zarut-Qingzhou ±800kV UHV DC project, with 196300 pre-bid porcelain insulators, worth about 95.8 million yuan, accounting for 15.73% of the company's 2015 revenue, and the delivery date is December 30, 2016. Zarut-Qingzhou project bidding porcelain insulators a total of 4 packages, the company won the bid accounted for about 34% of the largest bidder, the market position is further consolidated. In the past 16 years, the company has won the bid for Ximeng-Taizhou, Shanghai Miao-Shandong, Yuheng-Weifang, Zhalut-Qingzhou, with a cumulative order amount of 319 million yuan, more than twice the 15-year UHV order, providing a stable safety margin for 16-17 years' performance.
Focus on electric porcelain products, UHV vigorous construction to boost the company's performance
The market share of the company in the field of UHV porcelain insulators is more than 40%. In the first half of the year, the gross profit margin of insulators reached 36.74%, an increase of 10.32 pct over the same period last year. Composite insulators made an obvious breakthrough this year, with revenue up 332.56% over the same period last year, and gross profit margin increased by 7.20 pct to 14.81%. It is expected that another 4-5 lines will be approved to start construction in the second half of 16 years, and more than 30 UHV projects will be started within 5 years, with an investment of more than 10 billion yuan for corresponding insulators. As the leader of the industry, the number of orders has continued to rise in recent years, with a total of 371 million yuan of new orders in the past 16 years. With the acceleration of the progress of power grid construction, the confirmation period of new orders will be greatly shortened. In addition, the company's composite insulator products are expected to obtain railway CRCC certification this year, which will open up a broad market outside the company's power grid.
Major shareholders transfer their shares, and the change of the actual controller opens the space for extension transformation.
Liu Guixue, the former major shareholder of the company, transferred 40 million shares (including 20 million shares of unlimited sale and limited sale of conditional tradable shares) at a price of 28.00 yuan per share, accounting for 19.61% of the total share capital of the company, with a total transaction consideration of 1.12 billion yuan. Funing Yilong Magnetic Materials, the transferee, owns the listed company. Zhu Guancheng and Qiu Suzhen, the actual controllers of Yilong Magnetic Materials, have a number of assets related to rare earth reserves, separation, processing and magnetic material production, and the business structure adjustment of listed companies is expected to be relatively strong in the future. the transferee also said that it would not rule out the plan of asset merger and reorganization within 12 months, and the company is expected to achieve a multi-main business parallel model, which will open up a broad space for further development.
Professional managers + equity incentives form effective management
In 15 years, the company conducted its first equity incentive, awarding 4 million restricted shares to management and core technical personnel. The unlocking condition is that the 15 -, 16-and 17-year net profit has increased by 60%, 70% and 80% over 14 years. According to the third-quarter performance forecast, it is a deterministic event that the unlocking condition is reached this year. It is expected that after the completion of the company's business and personnel adjustment, the new actual controller is more likely to carry out equity incentives for the new management, and the company's performance will reach a new level.
Profit forecast
It is predicted that the EPS of the company in 16-18 is 0.47,0.62 and 0.79 yuan respectively, and the corresponding PE is 61 times, 47 times and 37 times respectively, maintaining the "overweight" rating of the company.
Risk hint: the progress of UHV construction is not as expected, and the progress of extension is not as expected.