Event: on January 13, 2017, the company announced its 2016 performance forecast. It is estimated that the net profit attributed to the parent company in 2016 is 1.35-141 million yuan, a sharp increase of 571.68% 601.53% compared with the same period last year.
Main points of investment:
Haocheng Electric combined watch, the traditional electrical equipment business is full of vitality. In December 2015, the company completed the acquisition and acquisition of Biao Haocheng Electric. Haocheng Electric's main products are solid insulated switchgear, ordinary high and low voltage switchgear, box-type substations, etc. 2016H1 realized revenue of 163 million and net profit of 13.73 million. Haocheng Electric consolidated table made 2016H1's traditional electrical equipment business revenue increase by 500% year-on-year, gross profit increased by 877% year-on-year, traditional electrical equipment business renewed vitality.
Vigorously transform new energy EPC service providers to create new highlights of the company's performance. In 2016, the company announced that the total amount of newly signed new energy EPC projects is 1.98 billion yuan. The company's new energy EPC project has been completed in 2016, and it is expected that the company will still have about 200MW new energy EPC projects in 2017.
The purchase of wind farms will be increased, and the scale of new energy operation is expected to continue to expand in the future. On September 22, 2016, the company announced the acquisition of 100% equity in Wanlong Wind Power and Jiaxing Wind Power through a private placement, with a fixed price increase of 10.43 yuan. Wanlong Wind Power and Jiaxing Wind Power have been connected to the grid, and there is basically no premium for this acquisition. According to our model, if this acquisition is completed, after deducting the interest cost of financial lease, it is expected to increase the net profit of listed companies by 19.08 million per year. In addition to this acquisition, the company also plans to hold more than 1GW of the new energy plant for three years. It is expected that the company will add about 300MW power stations every year to become a stable source of profits.
Continue to deepen cooperation with CLP's enterprises to expand the company's project resources. In September 2016, the company announced that the controlling shareholder signed a "Strategic Cooperation Agreement" with Shenzhen Qianhai China Power Investment and Fund Management Co., Ltd. and CLP Investment and Financial Leasing Co., Ltd., the parties plan to jointly set up a series of industrial investment funds with a total size of 2 billion yuan within two years to invest in new energy projects jointly selected by all parties, and Jiuzhou Electric has the right of priority to acquire the projects invested by the fund.
Absorb the lead-carbon battery technology of Harbin University of Technology and set up an energy storage company to actively enter the field of lead-carbon energy storage. The company signed the Strategic Cooperation Agreement for the Establishment of a Joint Laboratory with Harbin University of Technology in December 2016, and further established a joint venture with Professor Wang Dianlong of Harbin University of Technology in January 2017 to establish Harbin Jiuzhou Energy Storage Technology Co., Ltd. to enter the field of lead-carbon energy storage. In December 2016, the company signed the Strategic Cooperation Framework Agreement for Electric Energy Storage Project with Tailai County, which plans to build 30MW energy storage project. In the future, it is expected that the company will continue to make efforts in the field of energy storage, making the energy storage business another new growth point of the company.
DC fast charging pile certification has passed, which has obvious regional advantages in obtaining orders. In the field of charging piles, the integrated and split DC charging piles independently developed by the company have won two inspection certificates issued by national authoritative testing institutions; the company's charging pile products have also been selected as scientific and technological achievements in the field of new energy in Heilongjiang Province in the "12th five-year Plan" Scientific and technological Innovation Exhibition. With the construction of charging network in Heilongjiang Province and other areas, the company is expected to get larger orders.
The unlocking condition of equity incentive is high, and the management is confident in the development of the company. On December 18, 2015, the company completed the equity incentive plan with a total of 7.676 million shares, and the incentive price was 6.62 yuan, of which 5 vice presidents awarded 1.26 million shares. According to the unlocking conditions, the company's non-net profit deducted from 2015 to 2017 will not be less than 30 million yuan, 100 million yuan or 200 million yuan. The company has achieved its equity incentive performance target in 2016, and it is more likely to achieve the performance target in 2017 with the further release of profits from EPC business and new energy operation business.
Profit forecast and investment rating: in recent years, the company has made great efforts to develop new energy EPC and operational business, and transformed into a new energy integrated service provider. Based on the premise that the company's EPC business maintains high growth, stable income from operating business and the gradual landing of lead-carbon energy storage projects, without considering the impact of fixed increase on equity and performance, we estimate that the company's EPS in 2016, 2017 and 2018 is 0.40,0.63 and 0.75 yuan respectively, corresponding to the current PE of 31 times, 20 times and 17 times, respectively. The company's business strategy tends to be positive, and its performance in 2016 has slightly exceeded expectations, and we continue to maintain its "buy" investment rating.
Risk tips: traditional business development is lower than expected; EPC project development is lower than expected; energy storage and charging pile promotion is lower than expected; the company's implementation of additional issuance is uncertain.