Jinchuan project was completed and put into production at the end of the 16th. Shenwu's contact with the owner can be traced back to March of 12, and the owner's search for technology can even be traced back to the 1990s. The corresponding stages of subversive technology such as soil inoculation, basic experiment, pilot test, technical demonstration, commissioning, running-in and upgrading can be found in Jinchuan project. It takes a long time for industrial enterprises to achieve a breakthrough in the industrialization of technology, and once a breakthrough is made, they will enjoy the professional market for a long time.
Project summary: Jinchuan Group is the largest nickel and cobalt production base and the third largest copper production enterprise in China, with a huge amount of smelting slag, with an annual increase of 2.6 million tons. Jinchuan Group plans to invest a total of 3.7 billion yuan to deal with the new smelting slag each year. Construction of treatment facilities in two phases. The first phase of the project deals with 800000 tons of copper slag with a total investment of 1.08 billion yuan and adopts Shenwu new technology, with an annual output of 276000 tons of reduced iron powder, 34000 tons of zinc oxide powder and 449000 tons of steam.
In order to deal with copper slag, Jinchuan explored and developed related technologies by itself for more than 20 years without success: Jinchuan Group is a large state-owned enterprise in China, in order to solve the problem of its own smelting waste, worldwide has with the Iron and Steel Research Institute, Anshan Thermal Energy Institute, Lanzhou Steel Plant, Xi'an University of Architectural Science and Technology, Beijing University of Science and Technology, the Royal Swedish Metallurgical Research Institute and other units to find solutions, but failed for more than 20 years. Subsequently, self-research and development also failed to achieve a breakthrough.
From contact and exchange with Shenwu to signing the contract, it took 3 years of repeated discussion, verification and expert review: in March 2012, leaders and technicians of Jinchuan Group began to conduct research and exchange with Shenwu. After many discussions and docking between the two sides in nearly a year, Jinchuan initially recognized Shenwu technology, and then began a pilot test which was close to the normal scale. In order to ensure the truthfulness and objectivity of the process and results, Jinchuan Group has sent technical R & D personnel to track the pilot process throughout the process. The large-scale pilot-scale test results in the past year are very successful, which proves that Shenwu's technology can be industrialized, and the economy is really strong. In the following year, the two sides carried out engineering design and feasibility study report compilation, and the scheme was improved and discussed many times. After more than a year of omni-directional evaluation by a number of experts, the contract target was finally reached and the two sides signed a contract. After about 2 years of pre-construction and production, the project has been in stable operation and the index has exceeded the level of counterparts at home and abroad.
The technology has been recognized by the industry: in addition to Jinchuan, Shenwu Energy Saving has also passed the pilot test and technical demonstration of its copper slag with domestic well-known metallurgical enterprises such as Tongling Nonferrous Metal, Yunnan Copper, Baiyin Group and so on. And the technology has passed the evaluation of scientific and technological achievements of China Nonferrous Metals Industry Association, and has been identified as reaching the international leading level.
The market space is huge, and Shenwu takes the lead: China's clean smelting energy-saving technology has 3.2 trillion room for transformation. After the launch of the Jinchuan project in December 16, a large number of new orders are expected to be realized in 2017.
Profit forecast and investment advice: we expect the company to achieve an attributable net profit of 6.3 yuan and 1.11 billion yuan respectively from 2017 to 2018. Before the suspension of trading, Shenwu Energy Saving has a market capitalization of 18.5 billion, corresponding to a valuation of 29 times for PE in 2017 and 17 times for PE in 2018. With a high degree of technological leadership, the company will enjoy a trillion market for a long time, driving sustained high growth and rapid digestion of valuation, so it can now be valued at 30 times PE in 2018, corresponding to a market capitalization of 33 billion yuan, corresponding to a target price of 51.80 yuan, and maintaining a "highly recommended-A" rating.
Risk hint: the risk that the project schedule is lower than expected, market risk.