I. Overview of events
The company released its 2015 annual report: operating income was 3.079 billion yuan, an increase of 30.49% over the same period last year; net profit of shareholders belonging to listed companies was 6.366 million yuan, an increase of 111.37% over the same period last year, turning losses into profits; net profit of shareholders belonging to listed companies was 3.822 million yuan, an increase of 106.56% over the same period last year; total assets were 1.255 billion yuan and net assets were 1.054 billion yuan.
II. Analysis and judgment
Actively expand new products and new markets to turn losses into profits
In 2015, the company optimized the industrial and business structure, increased the development of new products and new markets, improved the efficiency of the use of assets, reduced production and operating costs, and achieved the goal of turning losses into profits. The financing of non-public offering of shares improves the capital structure and reduces the financial risk. At the same time, the company has completed the incentive mechanism for the core management, laid the personnel foundation for development, and the management ability will be brought into full play.
The future goal is clear, and there is a gap between the company's actual ability and the market expectation.
In 2016, the company will focus on reducing costs, making up for deficiencies, carrying out industrial upgrading and transformation, further expanding the market, making rational use of the capital market to improve the company's asset-liability ratio, and introducing new management concepts. We believe that although the copper pipe industry is facing the severe test of insufficient downstream demand, the company is actively transformed and rationally distributed to cope with the impact of the external environment, and the actual operation and profitability of the company are greater than market expectations.
The industry will take a turn for the better and the company will respond positively.
In the past two years, due to the impact of destocking in the real estate market, the sales of copper tube downstream industry-air conditioners and freezers are not good, there is also a large destocking pressure, and copper tube processing orders have decreased significantly. In addition, due to the reluctance of banks to lend, the capital cost pressure of copper tube enterprises remains high. However, after two years of downturn, the copper tube industry is about to usher in a major reshuffle, the future production capacity of the industry will be curbed, and will actively layout to overseas markets. We believe that although the industry is still at a low ebb, the competitive landscape will be changed and the company's profitability will be improved.
Third, profit forecast and investment suggestions
We are optimistic about the future development of the company, and predict that from 2016 to 2018, the EPS will be 0.26,0.33,0.42, and the corresponding PE will be 59,46,35, with a "highly recommended" rating.
Fourth, risk tips: systemic risk, downstream industry recession