Azure Dragon pipe industry is one of the leaders of PCCP and other supply and drainage pipes in China, and its main products are PCCP, RCP, PCP and PVC\ PE pipes. Originally a subordinate enterprise of Ningxia Water Resources Department, now the actual control is Chen Jiaxing, the company base breaks through the northwest in the national layout. Due to the cyclical fluctuation, the company has been at a cyclical trough in the early stage, so the company actively adjusts its strategy, improves the efficiency of capital utilization, and actively explores new profit growth points.
PCCP and other reinforced concrete pipe development space is still large, the bottom of the boom industry oligarchs will usher in new development. PCCP has the advantages of superior performance, strong personalization and regionalization, historical performance, order-taking ability, capital adequacy, national standard requirements and environmental protection requirements. The stronger the future, the stronger the trend. There is a serious imbalance in the distribution of domestic water resources, and the demand space related to long-distance water transportation and water supply is still vast. With the rapid development of urbanization, urban drainage pipe network can not load the growth of urban population, and there is a huge space for transformation. Since 2016, as large-scale water supply and transportation projects have entered the middle stage of bidding and the PPP project has entered the release period, the reserve of water supply and drainage projects has been rich, and the prosperity of the industry has rebounded at the bottom. Azure Dragon, as a leading enterprise in the industry with large caliber and experience in large-scale projects, will benefit from the new changes in the industry.
The high increase in orders, the determination of performance growth and the efficient use of funds have brought new growth to the company. New orders signed by the company in 2016 are expected to reach 1.6 billion yuan, with orders in hand exceeding 2.1 billion yuan, a year-on-year growth rate of 60%. At the same time, with the continuous launch of PPP and new large-scale projects, the company's supply and management will enter a peak in 2017, which will become the basis for high business growth in the next two years. At the same time, the company tries and operates enterprise funds, ensures the preservation of capital value and efficiency, actively explores new business growth points, and has set up small and medium-sized loan companies and applied for private banks. The new general manager, PE, came from an investment background and took office to inject fresh blood into the company, promoting the company's extension development and accelerating the development of new business.
Company profit forecast and investment rating. As one of the leading enterprises in the industry, the company benefits from the launch of large-scale water supply and transportation projects and the release of PPP projects, the bottom of the industry boom rebounded, and the inflection point of performance growth appeared.
It is estimated that the company's EPS from 2016 to 2018 will be 0.10,0.37 and 0.55 yuan respectively. Considering that the performance growth is certain, the funds are sufficient, the company is actively exploring new profit growth space, and the valuation level is not high, the company is given a "highly recommended" investment rating.