Main points of investment:
Gas suppliers in Kashgar area
The company's main business is the transmission and distribution of urban gas, sales and gas facilities and equipment installation.
At present, the operating area of the company's urban gas business includes "one city and two counties", that is, Kashgar City, Shufu County and Shule County. The company's main products include natural gas sales and household installation. At present, the company has built and put into production 12 gas filling stations in Kashgar, ranking first in number and occupying an absolute majority of market share. Two gas filling stations have been built and put into production in Shule County, accounting for about 50% of the market share.
Fund-raising projects to improve storage, transportation and distribution capacity
The funds raised are mainly invested in the CNG gas station construction project in Kashgar City, the natural gas project in Kashgar City, the natural gas project in Shule County and the natural gas project in Shufu County. After the completion of the fund-raising project, the company's gas network coverage will be greatly expanded, the storage and distribution capacity will be substantially improved, and the number of users and the scale of gas supply will be greatly increased on the existing basis, forming the company's main profit growth point in the next few years.
Profit forecast
According to the construction progress of the fund-raising project, we estimate that the net profit attributed to the parent company in 2017 and 2018 will be 104 million yuan and 113 million yuan respectively, with year-on-year growth rates of-11.91% and 7.91% respectively, and corresponding diluted earnings per share of 0.74 yuan and 0.80 yuan.
Pricing conclusion
The total share capital of the company before this issue is 106 million shares, and no more than 35.5 million shares are proposed to be issued this time, accounting for 25.09% of the total share capital of the company after the issue. The issuing price of the company is 13.60 yuan per share. Taking into account the valuation of comparable companies in the same industry and the growth of the company, we think that the reasonable valuation of the company is 25.82-29.51 yuan, corresponding to the price-to-earnings ratio of 35-40 times earnings per share in 2017.
