Core viewpoints

Ice-making equipment has a broad market space, focusing on expanding new markets and new application fields: corporate ice-making equipment has formed a stable market share, and customers in domestic and foreign industries cover a wide range of fields. the products are mainly used in many fields, such as concrete cooling, cold chain logistics, nuclear power, chemical industry, merchant super, food processing and so on. Take advantage of technology, brand and quality. The company's ice-making equipment has always maintained a leading position in the industry, and the business development is stable. As the country pays more and more attention to food safety and medical safety, as well as the further increase of investment in infrastructure such as energy conservation and environmental protection, nuclear power and ice and snow venues, there is still a large market demand for ice-making equipment. In the future, the company will focus on expanding new markets and new business areas, such as large ski venues, high-end ice-making equipment market, edible ice market, etc., to further expand the global market share of ice-making equipment and further maintain a leading position.

Master the core technology of the compressor, cold chain logistics brings development opportunities: the company has mastered the core technology of the compressor, with SRM and RefComp two international well-known compressor brands, rich product series, leading technology, among the international refrigeration field of high-end equipment manufacturers and system solution suppliers, the compressor business has gradually become the company's core business of rapid growth. Under the guidance of the industrial policy of adjusting the national industrial structure, developing advanced equipment manufacturing and encouraging the development of energy saving and environmental protection and cold chain logistics industry, the market of commercial refrigeration and industrial refrigeration equipment in China is developing rapidly. it brings great opportunities for the development of the compressor industry. The company's current orders are full, and as the company further improves the global market layout of compressors and increases the development and expansion of new products and compressor applications, revenue and market share will maintain rapid growth.

International oil prices continue to rise, Jiayun oil and gas is expected to exceed the promised performance: Jiayun oil and gas main business for natural gas project construction, production and operation of professional technical services, Snowman refrigeration, ice-making equipment and system research and development, production, sales and services, its core equipment compressor can be extended to the field of natural gas It can give full play to the product and technical advantages of the compressor and the qualifications and channels of Jiayun oil and gas in the field of natural gas to form a synergistic effect. Jiayun Oil and Gas promises that the net profit attributed to the parent company will not be less than 44.72 million yuan after deducting non-recurring profits and losses in 2017. Since the OPEC production limit agreement was reached in 2016, the oil price in the international market has continued to pick up, the investment expenditure of downstream oil companies has begun to recover, and the income of oil service companies has rebounded sharply. Jiayun Oil and Gas's first-half net profit reached 24.48 million yuan, an increase of 37% over the same period last year, and is expected to exceed the promised performance for the whole year.

Deeply lay out the fuel cell industry and open up a new space for growth: relying on the core technology and first-mover advantages of the air compression system, the company establishes a strategic cooperative relationship with Xinyuan Power, a leading domestic fuel cell company, and carries out joint research and development of fuel cell stack projects with a number of domestic colleges and universities, realizing the company's industrial extension in hydrogen energy, fuel cell and other new energy fields. The company participates in American CN company, introduces fuel cell turbine air compressor technology, and realizes the diversified development of fuel cell air circulation system technology. Luckily, the successively developed turbine mechanical technology of CN has significantly improved the company's hydrogen liquefaction technology.

Since 2016, the company has set up a wholly-owned subsidiary Shanghai Snowman New Energy Technology Co., Ltd., and participated in the establishment of Snow hydrogen Industry Investment Management (Pingtan) Co., Ltd., the company's participation in the "rapid dynamic response fuel cell engine research and development project" has been selected into the national key research and development plan list. The company invests in Hydrogennics Corp, a famous global hydrogen fuel cell manufacturer in Canada, and accelerates the development in the field of fuel cell and hydrogen energy with the help of the core technology and brand advantages of SRM and OES's fuel cell air cycle system. It is expected that related products will bring performance one after another and open up new growth space for the company.

Investment suggestion: we predict that the EPS of the company from 2017 to 2019 is 0.08,0.12 and 0.18 yuan respectively, and the corresponding PE is 121,75 and 50 times respectively. The ice-making equipment industry where the company is located has a broad market space and will focus on new markets and new applications in the future. The company will benefit from the development opportunities brought by cold chain logistics by mastering the core technology of compressors. With the recovery of international oil prices, Jiayun Oil and Gas, a subsidiary, is expected to exceed its performance commitment for the whole year. The company has successively invested in CN, a leader in fuel cell turbine air pressure technology, and Hydrogennics, a famous global hydrogen fuel cell manufacturer in Canada, and has the first-mover advantages of SRM and OES's fuel cell air cycle system core technology and brand. It is expected that the fuel cell business will open up a new growth space for the company. We are optimistic about the future development of the company and upgrade its rating to "highly recommended".

Risk tips: the demand of the refrigeration equipment industry is lower than expected; the performance of mergers and acquisitions is not as expected; the development of fuel cell business is not as expected.