Main points of investment
The annual performance achieved positive growth in 1.2016, which is expected to require the company to have three main industries: automation, oil and gas services, and intelligent industry. in 2016, it is expected to achieve a net profit of 80.1626 million yuan to 88.1789 million yuan, an increase of 10% over the same period last year, reversing the loss situation in the first half of the year. The positive growth in performance is due to the steady increase in automation business revenue, and the implementation of new projects such as smart city (building automation), oil and gas field chemicals and oil and gas field environmental protection, through business cooperation and equity cooperation, the scale continues to grow, and the overall competitiveness of the company has been effectively improved.
On December 15, 2016, the company awarded 20.29 million restricted shares to 147eligible incentive targets at a price of 5.33 yuan per share. This equity incentive requires the company to be based on the average net profit from 2013 to 2015, with a net profit growth rate of no less than 30 per cent, 40 per cent and 50 per cent respectively from 2016 to 2018, which is expected to be met in 2016 according to the currently disclosed performance forecast data. In the long run, this equity incentive will promote the consistency of the interests of the company, shareholders and employees, effectively mobilize the enthusiasm of managers and employees, and lay a solid foundation for the long-term development of the company.
two。 Actively promote the strategic layout and the balanced development of the three main industries
In recent years, the company has actively implemented capital operation to promote extension development, and expanded the scope of oil and gas service business through mergers and acquisitions. At the same time, the company actively distributes intelligent industries and strives to expand automation business and intelligent industry business from non-oil and gas industries, in order to smooth the fluctuation of production and operation cycle caused by uneven distribution of oil field orders. the company has acquired Jade Bird Electronics, Qiushi Jiahe, Zhengzhou Xinsheng and other high-quality companies, and made continuous breakthroughs in smart city, smart grain depot, smart water and other fields. Up to now, the company has formed a balanced development pattern of automation, oil and gas services and intelligent industry, and new profit growth points continue to emerge.
3. The continued rise in oil prices has led to a rebound in capital expenditure in the oil and gas industry, which accounts for more than 40% of the company's revenue from the automation business of the company's oil service business, and more than half of the automation business comes from the oil service industry. Due to the sharp decline in capital expenditure of integrated oil and gas companies brought about by the collapse in oil prices in recent years, the company's related business performance is mediocre. Since the first half of 2016, oil prices have continued to rise due to changes in the supply and demand pattern of crude oil, especially with the conclusion of the OPEC production reduction agreement in December, the global crude oil market is expected to achieve a balance between supply and demand in 2017, crude oil prices are expected to rise further in the future, capital expenditure of the world's major integrated oil and gas companies will resume the upward trend, and the prosperity of the oil service industry will usher in an inflection point, which companies are expected to benefit from.
In addition, the revenue share of security control technology in the oil industry is still very small, which is only a small part of the total capital expenditure of the two barrels of oil, and the room for growth is still considerable. Taking into account the company's advantages in all aspects, actively promote business layout and capacity improvement, it can be expected to make a breakthrough in the oil and gas service business.
4. Profit Forecast:
It is estimated that the company will achieve a net profit of 87 million, 161 million and 213 million in 16-18 years. Considering the dilution of additional shares, the corresponding EPS is 0.15,0.27,0.36 yuan, and the corresponding PE is 62X, 34X, 25X, maintaining the recommended rating.
5. Risk Tips:
New business advance is lower than expected and goodwill is impaired.