Mainly engaged in rail transit, power equipment large steel castings; rail crossing and other castings accounted for more than half of the company's major technical equipment supporting large steel castings, the performance mainly comes from rail transit castings and power equipment castings. In 2015, the company's other castings (mainly rail transit) accounted for 50% of revenue and 63% of profits, while electric equipment castings accounted for 47% of revenue and 32% of profits.
Rail transit castings are for GE and other famous multinational enterprises in the United States. The strong research and development capacity of the company independently designed the casting process of heavy-duty high-horsepower diesel locomotive bogies. Since 2013, the annual output has accounted for more than 50% of the total global purchase orders of GET, becoming the only one of the hundreds of GE suppliers who have won the "emerging Fast growth Award" and "Best supplier Award" for three consecutive years.
And "Best quality Award" company. After the company's IPO investment project, the production capacity has been effectively improved; at the same time, the company has signed a long-term supply agreement with the Ministry of GE Rail Transit, so that the company's new rail transit bogie capacity has been effectively digested.
Thermal power castings benefit from thermal power upgrading, hydropower castings have been tested by the three Gorges project, the company has steadily increased the complex large castings of ultra-supercritical heat-resistant steel and high-end castings of heat-resistant steel cylinder block and valve body of large steam turbines, realizing casting instead of forging and replacing imports. Independent design and development of heavy-duty gas turbine exhaust cylinder and turbine cylinder block, become the key supplier of GE energy. The national industrial policy of shutting down small thermal power and encouraging high-power and efficient thermal power will promote the downstream mainframe manufacturers' demand for high-power thermal power castings and benefit the company.
In terms of hydropower products, the company has provided a large number of reliable hydropower runner products for the three Gorges Corporation for many years, and has become the only private enterprise certified by the Sanxia Committee of the State Council. According to the 12th five-year Plan for Renewable Energy Development compiled by the State Council, China's hydropower installed capacity should reach at least 420 million kilowatts by 2020, and the future market space for hydropower equipment castings of the company is still very broad.
Non-public offering: 500 million yuan has been raised and feedback has been received; in the future, transformation and upgrading will be accelerated. This issue intends to raise no more than 500 million yuan, the main purpose of which is to achieve product upgrading and improve product structure. The main fundraising project is the intelligent manufacturing and processing project of key components of major energy equipment.
It is estimated that the compound growth rate of non-performance deducted from 2016 to 2018 will exceed 30%, and the EPS will be 0.30 Universe 0.39 Universe 0.51 yuan. The company has a small market capitalization and will accelerate its transformation and upgrading in the future, covering "cautious recommendation" for the first time.
Risk hint: rail transit GE key customer risk, transformation and upgrading are lower than expected