Events: the company disclosed its 2015 annual report on the evening of April 7. during the reporting period, the company realized operating income of 1.692 billion yuan, down 23.40% from the same period last year; net profit of shareholders belonging to listed companies was 66.1593 million yuan, up 10.79% from the same period last year; and basic earnings per share was 0.1106 yuan. The company intends to add 5 shares for every 10 shares to all shareholders and pay out 0.4 yuan (including tax).

The general environment is depressed, and production and sales are declining. As the two target markets of welding materials, the manufacturing industry and capital construction are in the doldrums, the manufacturing investment slows down and the major engineering projects are understarted, which leads to the continuous shrinkage of the market demand of the welding materials industry and the prominent contradiction between supply and demand, which has an impact on the company's sales. During the reporting period, the output completed was 344700 tons, 84.69% of the annual plan, down 7.92% from the same period last year; sales volume was 351200 tons, 86.28% of the annual plan, down 13.58% from the same period last year. The total profit was 91.066 million yuan, 101.19% of the annual plan, an increase of 1.46% over the same period last year. Despite the decline in the company's production, sales and income, the total profit still achieved the planned target and maintained a basically stable level, mainly due to the increase in financial income and land income.

The strategic transformation from "welding material expert" to "welding expert". In 2015, the company made every effort to promote the construction of the "Welding Industry Park" project to realize the transformation and upgrading of the main manufacturing process of welding materials. Phased results have been achieved: the main plant of the first phase of five projects (120000 tons of ordinary electrode relocation project, 25000 tons of nuclear power military project, 50,000 tons of solid wire project, 5,000 tons of non-ferrous metal wire project, 5000 tons of special flux cored wire project) has been handed over for acceptance, and equipment commissioning and trial production are expected to start by the end of the third quarter of this year. At the same time, the "Welding Industry Park" MES project, as the core part of the company's production management efforts to upgrade to automatic and intelligent manufacturing, has been officially launched. The company is working on a non-public offering of shares in 2015. By acquiring 51% of Weidi's shares, the company will enter the field of microelectronic welding materials and further expand the company's special welding materials industry chain. it is in line with the company's strategy to develop from a "welding material expert" to a "welding expert" and from a single welding material product provider to an overall welding technology solution provider.

Great progress has been made in the localization of nuclear grade welding materials. The company is the enterprise with the strongest R & D capability and supporting capability of nuclear power and military welding materials in the industry, and has the core technology of some nuclear island main backup welding materials. it is the only production enterprise in the industry that undertakes the research and development of domestic application and development of nuclear grade welding materials. At present, all the nuclear power projects built and under construction in China and the Chashma Nuclear Power Station in Pakistan, Karachi K2 and K3 units have used the company's special welding materials for nuclear power.

During the reporting period, 14 products of the project "Major Project of large Advanced PWR Nuclear Power Plant-Research and Development of Welding Materials for Nuclear Power equipment" led by the National Nuclear Power Institute 728 all passed the stage review and completed the third party performance evaluation experiment. All the projects of "National Energy Applied Technology Research and Engineering demonstration Project-Localization Development and Application Research of Nuclear Grade Welding Materials" led by Suzhou Thermal Engineering Research Institute (CGN) have completed 5 batches of production and third-party evaluation tests. The company has successfully passed the acceptance of Guangdong Provincial Department of Science and Technology in the project of "Research on Localization of spare key Welding Materials for Nuclear Power Station" led by Zhongguang Nuclear Engineering Co., Ltd.

Valuation and rating. At present, China's nuclear power project conventional island (CI) and power station auxiliary facilities (BOP) used welding materials have basically achieved localization, while the nuclear island main equipment installation of welding materials more also need to rely on imports, Atlantic as the only designated domestic production manufacturers, with the "25000 tons of nuclear power and military welding materials production project" put into production, will benefit from the import substitution process for a long time, become the company's profit growth point.

Risk hint: raw material price fluctuation risk; project development is not as expected.