Event: on November 7, the company signed a letter of intent for Cooperation in setting up an Industrial Fund with China Natural Gas Group and China Nuclear No.5 Corporation. Industrial funds mainly invest in LNG-related projects, with a total capital investment of 5 billion yuan, and do not rule out the introduction of other investors.
Comments:
A) the signing of this cooperation intention is in line with the company's goal of continuing to become bigger and stronger and further develop in the natural gas industry chain.
B) the industrial fund partner has a deep background, and the company can make full use of its customer resources and technical advantages. CNG is a listed company on the Hong Kong Stock Exchange, mainly engaged in retail trade and transportation of liquefied natural gas, and has rich downstream customer resources. CNNC 5 belongs to China Nuclear Industry Construction Corp. mainly engaged in the installation and construction of large-scale nuclear and petrochemical projects, with rich technical experience.
C) provide financial support for the subsequent signing of large orders. The company signed a 4 billion strategic cooperation agreement on comprehensive utilization of shale gas with the government of Yongchuan District of Chongqing this year, and the industrial fund reached 5 billion yuan, which also provided financial support for the company.
Diversified layout, to create a leading international clean energy overall solution service provider, the acquisition of Sichuan Hongda, to expand the energy engineering EPC business. LNG heavy trucks continue to recover, and the demand for gas stations has increased significantly. The signing of shale gas energy comprehensive utilization strategic cooperation agreement project strategic agreement is expected to greatly increase the company's performance.
Investment advice and rating: the company's net profit from 2017 to 2019 is expected to be 198 million yuan, 286 million yuan and 348 million yuan, and EPS is 0.53,0.77 and 0.94 yuan, with a price-to-earnings ratio of 32 times, 22 times and 18 times respectively. Give a "buy" rating.
Risk hint: the development of the natural gas industry is not as expected and the EPC business is not as expected.