The armor group is in charge, and there is a lot of room for performance repair when it returns to the main business.
Through participating in non-public offering subscription, China Arms and equipment Group has increased its direct shareholding to 33.47%, officially becoming the largest shareholder of the company. With the support of strong shareholders, the company returned to the main business of power transmission and transformation and stripped off its lossmaking assets. In 2014, the company's operating area improved significantly: the power transmission and transformation sector achieved a net profit of 764 million yuan, an increase of 119.94% over the same period last year, and the gross profit margin of its products increased to 20.31%, an increase of 151.36%.
The business area is improved, the performance is repaired, and the value of the company needs to be revalued.
Pay attention to the breakthrough of the company's nuclear power transformer business
Under the background of the continuous rise of the nuclear power industry, the company's own nuclear power transformer is unique in the market, the domestic market share is conservatively estimated at more than 50%, the brand advantage is obvious, and is optimistic about the performance increment brought by the company's nuclear power transformer under the industry boom. At the same time, the company is also unique in the overseas nuclear power transformer market, the company successfully developed and delivered the ITER project French power transformer project, the company's products have won international recognition.
Key hypothesis
Domestic UHV construction continues to accelerate, and the number of nuclear power units started in China during the 13th five-year Plan period reached more than 30.
Stock price catalyst
According to China's medium-and long-term nuclear power development plan, by 2020, China's operating nuclear power installed capacity will reach 58 million kilowatts, with about 3000 kilowatts under construction. At present, nuclear power generation accounts for only 3% of the country's total power generation, while globally, nuclear power generation accounts for more than 10% of the total electricity generation, of which nuclear power generation accounts for more than 20% of the total electricity generation in more than 10 countries. There is still much room for the development of nuclear power in China.
Investment rating
We estimate that in 2016 Mel 2018, the company's EPS will be 0.06,0.14 and 0.26 yuan respectively, and the corresponding dynamic PE will be 108,46 and 25 times, respectively. Using the absolute valuation method, we give the target price 9.24 yuan. Cover for the first time, giving a "buy" rating.
Risk hint
The company's financial situation continues to deteriorate, transformer orders fall short of expectations, competition in the nuclear power transformer industry intensifies the risk of compressing the company's market share, and overseas nuclear power transformer business falls short of expectations.
