Core viewpoints
Touri Xinneng, a technologically leading power operator and EPC contractor, is a pioneer in solar energy, dedicated to creating a better environment and life for human beings. At present, the company mainly produces monocrystalline silicon, polysilicon, amorphous silicon solar cell chips, solar cell windows and photovoltaic cell curtain walls, solar cell modules and power supply systems, LED lighting and large LED display projects. Touri Xinneng, a former manufacturing company, has been transformed into a contractor for power operation and EPC.
The photovoltaic industry is growing rapidly, and Touri Xineng has a strong performance support: solar power generation is a sunrise industry supported by the state and local governments, and the industry is developing rapidly, and photovoltaic power generation will continue to grow in the next 20 years. At present, the company's power station revenue is 200 million, and the profit is close to 100 million. Currently, the company owns a total of 240MW power plants (plant performance accounts for 70-80% of the company's profits). This year, it plans to hold another 90-100MW (equivalent to 70-80 per cent of the workload of previous years). In addition, the company has completed the EPC of 60MW in the first half of the year (a total of EPC of 10MW last year), and the EPC plan in the second half of the year is still going ahead, with strong support for its performance.
Low asset-liability ratio, low-cost rapid expansion: at present, the company fully realizes the independent production of solar equipment, the construction cost is very low, and can achieve low-cost rapid expansion; the company's asset-liability ratio in recent years is only about 30%. Far lower than the industry's asset-liability ratio of 60-80%, there is much room for improvement in financial leverage and strong potential for development. We expect the company to achieve net profit of 200 million, 302 million and 405 million respectively from 2017 to 2019, with diluted EPS of 0.16,0.24,0.33 yuan respectively, and the current share price corresponding to PE of 28.2X, 18.5X and 13.9X respectively, covering for the first time and giving [recommended] rating.
Risk hints: the risk of changes in government policies and government subsidies; the risk that the growth rate of performance is lower than expected.