On February 1, the company disclosed the “2024 Stock Issuance Plan to Specific Targets” and the “Shareholder Return Plan for the Next Three Years (2024-2026)”. According to this fixed increase plan, Guangzhou Kaide, the controlling shareholder of the company, will subscribe for all of the shares of this fixed increase, demonstrating the controlling shareholders' confidence in the company's future development. By raising capital from controlling shareholders this time, the company mitigates the original working capital and further enhances the company's resilience to risks. In the future, with the further release of offshore and overseas wind power demand, the company is expected to fully benefit as an established domestic wind power tower pile foundation enterprise and maintain the company's “buy” rating.
Key points to support ratings
The controlling shareholder subscribed in full, demonstrating confidence in the company's future development. According to the fixed increase plan disclosed this time, the company plans to issue no more than 175 million shares. After deducting the company's new investment and proposed financial investment amount of 14.09 million yuan in the previous six months, the total amount of capital raised this time will not exceed 1200 billion yuan. Guangzhou Kaide, the controlling shareholder of the company, will subscribe for all shares issued in cash. After full subscription, its shareholding ratio will increase from 26.93% to 38.43%. The controlling shareholder's full subscription to the shares issued shows confidence in the company's future development prospects and strong support for the company's business transformation.
Raise capital to relieve the pressure on working capital and provide financial support for the company's business development. All of the net capital raised in this offering will be used to supplement the company's working capital. After the capital raised in this offering is in place, the financial pressure on the company's rapid development will be alleviated, the balance ratio will be reduced, the capital structure will be optimized, financial risk and operating pressure will be released at the same time, and capital strength and resilience to risk will be further enhanced, which will help further enhance the company's profit level and enhance the company's long-term sustainable development capability.
The shareholder return plan for the next three years was announced to further boost confidence in development. According to the announcement, the company will distribute dividends using a combination of cash, stocks, cash, and stocks. In the case where the company is profitable for the current year and meets normal production and operating capital requirements, the company shall distribute dividends in cash. The profit distributed in cash is not less than 20% of the distributable profit achieved in the current year; in the case where the company's net profit for the half of the year increased by more than 30% year-on-year, and the ratio of net cash flow from operating activities to net profit is not less than 20%, the company can pay interim cash dividends; under the premise of ensuring full cash dividends, when the company's cumulative profit is not distributed When the share capital exceeds 30%, the company can pay stock dividends.
valuations
We maintain the company's profit forecast. We expect the company's revenue for 2023-2025 to be 47.12/69.95/8.850 billion yuan, net profit to mother of 431/6.32/885 million yuan, EPS 0.46/0.68/0.95 yuan, corresponding PE is 17.4/11.9/8.5 times. Considering the company's position as an established domestic tower manufacturer, it may fully benefit from the further release of offshore and overseas wind power installation demand in the future, and maintain the purchase rating.
The main risks faced by ratings
Wind power installations fall short of expectations; risk of fluctuations in raw material prices; capacity expansion falls short of expectations; risk of increased competition.