This report is read as follows:
Zhu Yongfu, the company's third largest shareholder, plans to reduce his stake by no more than 2% within six months. we believe that this reduction is mainly used to return the principal and interest of some shares, and the lifting of the stock freeze is expected to speed up the rescue of state assets. The target price is 8.58 yuan.
Main points of investment:
Maintain the "overweight" rating with a target price of 8.58 yuan. The company issued a "pre-disclosure announcement on the reduction of shares by shareholders holding more than 5 per cent" on December 14. Zhu Yongfu, a director and executive, intends to reduce his holdings of no more than 11.08 million shares through centralized bidding within six months after 15 trading days, that is, no more than 2 per cent of the total share capital of the company. We believe that the impact of Mr. Zhu's reduction is relatively small, and it is mainly used to return the principal and interest of some brokerages' equity pledge, and the lifting of the stock quality freeze is expected to speed up the rescue of state assets. It is estimated that the operating income from 2018 to 2020 is 9.15,12.08,1.607 billion yuan respectively, and the net profit of returning mother is 1.21,1.74,240 million yuan, corresponding to EPS0.22, 0.31,0.44 yuan. Maintain the "overweight" rating, with a target price of 8.58 yuan, corresponding to 2018 PE39 times.
We believe that the impact of Mr. Zhu Yongfu's reduction is relatively small, and it is mainly used to return the principal and interest of some brokerage equity pledge. According to the detailed rules for the implementation of share reduction on the Shanghai Stock Exchange, if major shareholders or specific shareholders reduce their holdings by means of centralized bidding, the total number of reduced shares shall not exceed 1% of the total number of shares of the company within any 90 consecutive days. This reduction, Zhu Zong arbitrary 90-day reduction of shares shall not exceed 5.54 million shares, less impact on the company's share price, we judge that this reduction may mainly be used to return some brokerage equity pledge principal and interest.
Recently, private enterprise rescue policies have been introduced intensively, and the lifting of the stock freeze will help to link up with the possibility of state-owned assets bail-out. We believe that 13 provinces, including Beijing, Shanghai and Guangdong, have set up rescue funds. Jiangsu Province, as an important gathering place for listed companies, is expected to implement supporting policies in the near future. Considering that the company is in the state-supported energy saving and environmental protection industry, it is expected to be the first to receive government assistance in this rescue, and the proportion of the first and third largest shareholders of the company is relatively high, so if Mr. Zhu returns the principal interest this time, it will help to unfreeze the stock quality. speed up the docking of state-owned rescue funds.
Catalyst: speeding up the landing of private enterprise relief policy
Risk hint: uncertainty risk in the implementation of this reduction plan; risk of new business integration