I. Overview of events
Recently, we have made further contact with Jinshi Dongfang to learn about the recent business situation of the company's management and some new development strategies in the future. We estimate that the EPS for 15-17 years will be more than 0.69,0.85,1.04 yuan respectively, giving a "highly recommended" investment rating for the first time, with a reasonable valuation range of 70 yuan.
II. Analysis and judgment
Continue to develop the main business of pipeline equipment, focus on the development of PPP project to expand the company's composite pipeline production is not a simple equipment, including coating experts, plastic abrasives, plastic process experts, institutional design experts, as well as systematic, including motor and air coating technology accumulation, high technical barriers, and perfect patent protection, is the company's core products. In the future, the company will gradually participate in the PPP project to expand downstream pipeline production and pipe laying, with the total financing of the PPP project reaching 1.6 trillion last year. It is optimistic that the company will use PPP projects to participate in the future profit growth of urban pipe networks and sponge cities.
Vacuum coating equipment has broad prospects in the future.
The company will focus on vacuum coating business in 2016, and vacuum coating is a very mature technology for the company, so vacuum coating is regarded as a key direction of the company's future development. The best place to make a vacuum in China is in Chengdu, or the Whampoa military Academy where vacuum film is coated in China. At present, the company has sufficient funds, but also talent recruitment, the future is mainly to do LowE coating production line. At present, China is not forced to promote building energy conservation, with the improvement of building environmental protection requirements in the future, the prospect of LowE glass is relatively broad. A production line in Germany is about 80 million-100 million, and it costs about 50 million if it is done domestically. In the urbanization reform of our country, if environmental protection and energy conservation are forced to be introduced, then the industry will grow explosively.
Single three-dimensional garage solves the problem of urban parking and avoids the problem of difficult construction.
The company cooperates with Korea Hyundai Dongyang Sunshine Group, which specializes in intelligent parking, ranking first in South Korea and 200 sets in Seoul. At present, the strategic cooperation and the exclusive sales agent in China are mainly aimed at the most troublesome pain point of parking, focusing on this model and turning it into a standardized product. It can effectively avoid the difficulty of examination and approval of three-dimensional garage.
Third, risk tips
Risk hint: the overall economy continues to decline and industrial development is lower than expected.
Fourth, profit forecast and investment suggestions
We are optimistic about the development of the company in the fields of composite pipeline equipment, PPP project participation and vacuum coating equipment, and estimate that EPS will be 0.69,0.85,1.04 yuan in 15-17 years, giving an investment rating of "strong recommendation". At present, the reasonable valuation range is more than 70 yuan.