Main points of investment
The performance improved significantly in the first half of the year. The company achieved profit income / net profit of 7.69 million yuan in the first half of the year, an increase of 2.57% and 64.04% respectively over the same period last year, corresponding to EPS0.06 yuan, of which Q2 achieved EPS0.04 yuan in a single quarter, which was significantly improved compared with the previous quarter. The company's performance growth is mainly due to the wind power installation continues to maintain rapid growth, the company's product sales increased.
Lower prices of raw materials such as steel are the main reason for the improvement. The company is one of the few domestic and even global professional R & D, production and sales of wind power casting products, the main products are wheels, bases and other casting accessories, while the raw materials are mainly iron and steel products, the cost accounts for about half of the total cost. As steel prices have been falling all the way, the company's raw material costs have fallen sharply, and operating costs have dropped 5.69% compared with the same period last year. In the first half of the year, the gross profit margin of the company's main products improved 7.67pct compared with the same period last year, reaching 24.01%. The company's expenses for the three periods increased due to freight, increased R & D investment and reduced interest income, and the net profit rate of sales increased by 2.59pct to 7.17% compared with the same period last year.
Benefit from the wind power industry rush installation and large-scale products, product sales prospects are good. Affected by the expected adjustment of feed-in electricity prices, the wind power industry has continued the phenomenon of rush installation since the second half of last year, and the market demand for turbines and spare parts is strong. As a global leader in wind power castings, the company has abundant orders and products are in short supply. Coupled with the trend of large-scale wind power products and the continuous improvement of the manufacturing technology level of wind power equipment in downstream enterprises, the demand for high-power wind power castings continues to rise. On the other hand, the company has the advantages of brand, technology and scale as well as the ability of continuous supply in the high-power products above 2.5MW, and the competitive advantage is obvious, and the company's performance will still be strongly supported in the short term. In the future, it is expected that the 13th five-year Plan will also vigorously promote the development of offshore wind power, and the corresponding high-power wind turbine manufacturing capacity will further rise significantly. As a leader in high-power wind turbine castings, the company is expected to achieve greater benefits in the future development of offshore wind power.
Wind farm operation business based on the integration of industry chain may provide long-term growth space for the company. The company invested in the establishment of a wind farm project operation company at the end of 2014 to expand the scope of business and integrate the use of industrial chain resources. This makes the company both a wind power accessories supplier and a wind power operator, which will give the company more bargaining power than wind turbine suppliers. In addition, as the current gross profit margin of wind farm operation is higher than that of the original casting manufacturing business, the operation of wind farm will also add new profit growth points for the company and enhance its ability to resist risks.
Risk hint. The grid price of wind power is reduced, the development of the company's wind farm is uncertain, and the development of offshore wind power is not up to expectations.
Profit forecast and valuation. Taking into account the installed demand of the wind power industry and the rapid growth of the company's wind farm business, we give the company a profit forecast of EPS0.12/0.14/0.18 yuan for 2015-2017, the current price is 6.25yuan, corresponding to the 52max E 45max 34x, the company is given the 2015 P/B2.5x, the target price is 6.50RMB, covering for the first time and giving the "overweight" rating.
