Key points of investment
Incident: On September 11, Baoxin Technology and Sweden's Apani signed a unique cooperation agreement between the two parties.
Our comments on this are as follows:
Apani: High pressure electrode boilers combine low valley electric heat storage heating with environmental protection and cost advantages. 1) Swedish Apani cooperation agreement: Swedish Apani has core technology such as high and low voltage electrode boiler design and key component manufacturing. All parties hope that Baoxin Technology will be Sweden's exclusive partner in China. Baoxin Technology reduces product costs and shortens delivery cycles by purchasing key components, auxiliary components production, supporting assembly, market development, etc. from Apani Sweden, and jointly expands the development of Swedish Apani brand electrode boilers in the Chinese market, making it a leading brand in the Chinese market. 2) Combining environmental protection and cost advantages: Benefiting from the replacement of coal-fired heating, the regenerative heating business ushered in an opportunity to expand. High-pressure electrode boilers not only clean the environment but also meet the requirements for reducing energy consumption: compared with coal-fired boilers, they have obvious environmental advantages, and compared with gas boilers and biomass boilers, the use of low-valley electricity for energy storage heating has a good cost advantage. 3) CGN's in-depth cooperation and asset-light promotion: In June 2015, Shanghai Apani, a holding subsidiary of the company, and CGN Energy signed a framework cooperation agreement, agreeing that Shanghai Apani will provide equipment, construction implementation and technical services for the project; CGN Energy is positioned as the investment, construction and operation manager of the project, starting a new model of asset-light promotion. Shanghai Apani and CGN Baoding have signed an electric heat storage heating project for Hebei Agricultural University, with a total contract amount of 82.61 million yuan.
Youzhi Technology is a leader in matrix traffic monitoring, solving the pain points of traffic monitoring. Air environment monitoring is specifically divided into concentration and flow monitoring. The accuracy issue of flow monitoring is a pain point in the Ministry of Environmental Protection's implementation of double sewage charges and sewage rights transactions. The company initiated the acquisition of Youzhi in '13. Youzhi's matrix flowmeters solved the problem of traditional leather hosting being inaccurate, and began to be vigorously promoted by the General Measurement Department of the Ministry of Environmental Protection in '14. Currently, Guizhou, Ningxia, Liaoning and other places require the installation of accurate flow monitoring equipment. In the context of vigorous promotion of ultra-clean emissions, the approved ultra-clean emissions results will be an important opportunity for the development of flow equipment!
Crystalline silicon battery equipment was successfully developed, and the profitability of the structural parts business of the headquarters increased greatly. Through technical cooperation with researchers from the University of Konstanz in Baden-Württemberg, Germany, the company developed advanced solar crystal cell automation equipment and jointly built the RCT brand (China). Germany provides chemical processes, and Baoxin supplies automation equipment. Currently, similar products are sold at high prices abroad, and Baoxin Technology uses the RCT brand to quickly enter the market; the estimated gross margin is over 30%, far exceeding existing sheet metal structural products.
Investment advice: Maintain the increase in holdings rating. We forecast that Baoxin Technology's net profit in 16-17 will reach 0.78/10 billion yuan, with a current total market capitalization of 6.1 billion yuan. The company is an absolute leader in the fields of matrix flow monitoring, low valley electric heat storage heating, etc. Various regions require the installation of accurate flow monitoring equipment, and matrix flow monitoring has ushered in an explosion. The Apani high pressure electrode boiler combines low valley electric heat storage and heating with environmental protection and cost advantages. Maintain the increase in holdings rating.
Risk warning: Apani technology promotion falls short of expectations
