Main points of the report

Event description

The company announced its mid-2016 report: operating income of 465 million, an increase of 292.38%, and net profit of 74 million, an increase of 480%, equivalent to EPS0.01 yuan.

Event comment

The volume of photovoltaic business has been expanded, and the performance growth rate has increased significantly. Revenue in 2016H increased by 292.4%. The company is still in a period of rapid development, continue to open up the market, the development of new projects continue to increase. In terms of profitability, the gross profit margin for the current period is 29.8%. Due to the increase in the share of photovoltaic business (53.6%, an increase of 38.2 pcct over 15 years), gross profit margin has declined compared with 2015 and 2016Q1. Due to the increase in income, the rate for the current period decreased by 10 percentage points compared with last year to 8.6%. Separately, the management fee decreased by 7.2 percentage points, the sales expenses decreased by 2.8 percentage points, and the financial expenses increased by 0.1 percentage points. In the current period, the impairment loss of assets was 6.74 million yuan due to the provision of bad debts. The non-operating income decreased by 5.68 million yuan compared with last year due to the reduction of government subsidies. In the end, the net interest rate was 15.9%, an increase of 5.2 percentage points over last year, an increase of 480% in net profit vested, and 95.4% growth in non-vested net profit.

Sub-products: in the first half of the year, the subsidiary Shanghai Memphis focused on the development of distributed photovoltaic system engineering, undertaking a number of photovoltaic projects, making the photovoltaic business achieve volume, a growth rate of 2681%. Metal roof enclosure realized 12 new projects in the first half of the year, 7 projects to be started, and the final revenue increased by 93%. In terms of gross profit margin, metal roofing increased by 6 percentage points to 37.2% over the same period last year, and photovoltaic increased by 17.7 percentage points to 22.3% over the same period last year.

Third-quarter performance guidelines: it is estimated that the attributable net profit will be 164 million to 245 million from January to September, with an increase of 0% and 49%. From the growth point of view, the growth rate in the third quarter may have slowed down, but due to metal roofing, photovoltaic business is still in the rapid expansion of its, still maintained a high growth rate.

Revision of the non-public offering plan: the issuance object and amount have been adjusted. The chairman withdrew from the IPO, the amount of financing was adjusted to 700 million yuan, and the issue price was 8.73 yuan. Other participants in the SEO remain unchanged, the amounts are: Zhongzhi Financial Control (Tibet Yuanze, 247 million), Oriental Venture Capital (165 million), Fosun Ruizhe (Yadong Fuxing, 247 million yuan), Haier Venture Capital (41 million).

There is a good chance that the performance promise will be fulfilled. When the company is backdoor in 2015, the performance commitment is the corresponding performance for 15-17 years: 2.55,3.61 and 476 million yuan, which is slightly more than expected in 15 years, and it will be realized in 16 years combined with the company's current situation and past execution and performance. It is estimated that in 2016 and 2017, EPS0.46 yuan, 0.64 yuan, corresponding to PE30 times, 21 times, maintain the buy rating.

Risk hint: slow construction progress leads to lower revenue recognition than expected