Main points of announcement
On November 14, 2016, the company signed an Investment Cooperation Agreement with Unetic Group of the United States, which intends to invest 730000 US dollars to set up a joint venture with it in the United States, which aims to further implement the "going out" strategy, gradually build a marketing network covering the Americas, and increase product exports, especially to promote the entry of high-voltage and ultra-high voltage cables into the American market. The company has a 51% stake in the joint venture.
Main points of investment
Set up branches in the United States to promote the development of the American market
The establishment of a US subsidiary is expected to further drive the company's products out. Through the establishment of Hanhe Cable America through a joint venture with UneticGroup, the company will gradually build a marketing network covering the Americas, and is expected to increase its sales share in the Americas by virtue of its own technology accumulation in the fields of high voltage, ultra-high voltage and special cables. At the same time, the company is also expected to use overseas platforms to actively obtain cable technical information and improve the international influence of its products. We expect that the contribution of overseas markets (direct and indirect exports) to the company's cable revenue is expected to reach about 15% by 2020.
High-end products, reliable model, support the company's going out strategy steadily forward while the company maintains a strong competitive position in the power grid market segment, in recent years, it has also increased investment in R & D of new products such as marine cable, nuclear power cable, rolling stock cable and so on, and made positive progress. These new products have high technical and market barriers, and these qualities are the basis for the sustainable export of the company's products, and in recent years, through direct export and cooperation with domestic enterprises, the company has cultivated a large number of high-quality customers such as Saudi Aramco, Shell, China Nuclear Group and Huaxi Energy. The company's products and export model can support the company's going out strategy in the future.
Maintain the "overweight" rating
We expect that in 2016-2018, the company will achieve 0.124, 0.15,0.18,36.9,30.5,25.4 times EPS E under the current equity.
Risk hint
Changes in relevant local laws and regulations and investment policies may bring risks; new product development may fall short of expectations; industry competition may intensify.
