I. Overview of events
The company released its 2013 annual report on the evening of April 8: the revenue for the reporting period was 1.96 billion yuan, an increase of 16.93 percent over the same period last year, and the net profit belonging to shareholders of listed companies was 40.1 million yuan, an increase of 111.10 percent and 0.20 yuan compared with the same period last year. Distribution plan: 1 yuan for every 10 shares.
II. Analysis and judgment
During the period, the cost decreased as scheduled, and the performance increased sharply compared with the same period last year.
The company's 2013 attributable net profit increased by 111.10% compared with the same period last year, in line with the previous performance pre-increase announcement. The company achieved a sharp increase in profit under the condition of 16.93% revenue growth, mainly due to better expense control during the reporting period, with the expense rate falling 1.77 percentage points year-on-year and the net interest rate rising to 2.05% from 1.15% in 2012. Among them, the additional issuance raised funds arrived in March 2013, reducing the financial expenses of that year by 24.46 million yuan, which is the main reason for the decline.
The advantages of dust removers are gradually emerging, and the growth rate of the industry leader is accelerating.
As the leading enterprise of dust collector for large generator sets above 600MW, the company's dust collector business showed a good momentum of development in 2013, with sales rising to 161units from 123units in 2012, with a further increase in market share. In view of the improvement of thermal power environmental protection emission standards and the higher threshold of environmental protection equipment for large units, we believe that the company's dust collector business advantages will become more and more obvious. Up to now, the installed capacity of domestic units using new dust removal technology is only 87 million kilowatts, and the popularization rate is much lower than that of desulphurization and denitrification, and there is still much room for the transformation of dust collectors and the application of new technologies in the future. the company has good reserves and project performance in the transformation of mobile electrode electrostatic precipitator, low-temperature electrostatic precipitator, wet electrostatic precipitator and other new technology fields, and its main business growth rate is expected to be further accelerated.
Juhua Group is about to join Fida and is optimistic about the company's transformation strategy for a long time.
The company is currently raising a targeted additional issuance project for Juhua Group. After the successful issuance, Fida will become a holding subsidiary of Juhua Group, a key enterprise in Zhejiang Province. According to the disclosure of the additional issuance plan, Juhua Group will inject its environmental protection assets such as solid waste and sewage into Feida, combined with the company's brand awareness in the environmental protection market and relying on the support of the Zhejiang provincial government. the company is expected to achieve the strategic transformation from an atmospheric governance leader to a comprehensive environmental protection platform enterprise. The Zhejiang provincial government not only has the will to manage environmental protection, but also has the ability to invest in environmental protection. The launch of a series of key projects such as "five-water co-governance" indicates that environmental protection investment in Zhejiang Province will enter a peak in the next 3-5 years. Combined with the company's local advantages and state-owned assets, we believe that the company's transformation strategy is worthy of long-term optimism.
Third, profit forecast and investment suggestions
We expect the company's net profit from 2014 to 2016 to be 78 million yuan, 161 million yuan and 226 million yuan respectively, equivalent to 0.38,0.79 yuan and 1.11 yuan EPS respectively, and the corresponding share price PE53, 26 and 18 times. Short-term relative valuation is relatively high, but taking into account the company's good prospects for business transformation and huge room for development, the company maintains a "cautious recommendation" rating with a reasonable valuation of 25 yuan.
Fourth, risk tips:
There is still uncertainty about the timing of the issuance of additional assets and management integration.
