Investment suggestion

We expect the company's 2016-2018 net profit to be 296 million yuan, 379 million yuan and 432 million yuan, corresponding to an EPS of 0.31, 0.40 and 0.46 yuan, respectively. With reference to the closing price of February 14, 2017.14, the PE is twice that of 31-24-21, with a "recommended" rating for the first time.

Main points of investment

The layout of the four major businesses is perfect and cooperate with each other.

At present, the company has four sectors: communications, overseas power engineering, automotive wiring harness, and superconducting materials are all related to the main industry, there is synergy, and the core is the line. In recent years, the separation of hospitals, highways, real estate and other businesses, focus on the main line, the future will further around the main line to do some extension.

Signed more than 10 billion EPC orders in 2016

The company has a special team for overseas projects, and the whole project team is more experienced. Large orders were signed in October 2016, and most of the participants were large central enterprises. there is only one private enterprise of the company; the bid winning notice received by the company in 2016 plus the contracts already signed accumulated more than 10 billion yuan, and the average construction period of the order was 4-5 years, and the company confirmed the revenue according to the progress of the project. Benefiting from the national policy Belt and Road Initiative preferential loan project, the money is remitted directly from the domestic bank to the company, not through the owner, and the collection is guaranteed.

Superconducting material Company is in the lead in technology

At present, the conditions such as superconducting technology and supporting cooling lines are mature, the application market is very large, and the industry has a broad prospect, but the industry breakthrough still needs the support of national macro policies. The company uses the second generation high temperature technology, the domestic technology is leading, the international is also in the first echelon, some technical indicators even exceed the international level. Superconducting requires a large amount of pre-investment and technology accumulation, and the company will benefit greatly after the inflection point of the industry.

Risk Tip: future overseas EPC orders are less than expected risk.