Main points of investment:

1. Event

The company released three quarterly reports that the company achieved revenue of 1.113 billion yuan in the first three quarters of 2015, down 1.62% from the same period last year, and achieved a net profit of 61.8632 million yuan, an increase of 5.78% compared with the same period last year. From October 26 to 27, the China M & An Association and the German Federal M & An Association signed the "Shenyang Declaration on China-Germany M & A Cooperation" in Shenyang, and jointly launched the establishment of a Sino-German M & A fund with an initial size of 1 billion euros. Shenyang Broad Group, which is controlled by the actual controller of the company, spoke at the Sino-German Enterprise Investment and M & A Forum as one of the representatives of three Chinese enterprises.

two。 Our analysis and judgment

(1) the performance is in line with expectations and is expected to accelerate in the fourth quarter.

In the company's report, it is expected that the growth rate of the first three quarters will be 0% Murray 10%, and the actual growth rate is in line with expectations. Due to the large provision for bad debts in the current period, asset impairment losses increased by 151% compared with the same period last year (nearly 17 million yuan, and all kinds of receivables increased by less than 14% compared with the same period last year), which to a certain extent dragged down the company's performance. The company's gross profit margin and net profit margin increased 2.8pct and 0.5pct respectively compared with the same period last year, and the profitability was further improved.

The company expects full-year earnings growth of 0% in 2015 to grow by 10%. The company's Q4 growth rate in 2013 and 2014 was 27% and 21% respectively, with the highest growth rate for the whole year in a single quarter. Based on the company's orders and seasonal factors, we believe that the company's fourth-quarter results are expected to accelerate.

(2) China and Germany launch M & A funds (smart equipment), companies may benefit

The Shenyang Declaration on M & A Cooperation between China and Germany clearly points out that Northeast China will be used as an important cooperation base to support enterprises of both sides to participate in the construction of Sino-German equipment Manufacturing Industry Park (Shenyang). To build a docking cooperation platform between "made in China 2025" and "German Industry 4.0". The key service areas of Sino-German M & A funds include smart equipment, consumer goods, medical services, financial services and so on.

Shenyang Broad Group, which is controlled by the actual controller of the company, is the largest private enterprise in Shenyang area. the company has intelligent equipment business such as intelligent grinding robot, has more exchanges with Germany, and is expected to benefit in the future.

(3) acquire robot and environmental protection business and transform high-end intelligent equipment

The company previously announced the acquisition of Broad Environment and intelligent grinding robot business. The payment method is Broad Environment and Shenyang Bolint Intelligent Hi-Tech Robot Co., Ltd., which was established by the company in March with an investment of 100 million yuan. 20% 50% of the annual profit can be distributed, and the payment period shall not exceed seven years. We believe that this acquisition fully reflects the group's determination to support the development of the company and carry out group asset securitization, and the company will transform high-end intelligent equipment.

According to the previous announcement, intelligent grinding robot can be used in marine thruster (does not rule out military), iron castings, aluminum alloy wheels and other fields, the main functions include polishing, grinding, deburring and so on, can effectively replace manual, greatly improve the accuracy and speed of grinding. The company expects that after the project reaches production, the sales of robots will eventually reach 300 / year, with an average annual increase of 365 million yuan in business income and 66.08 million yuan in after-tax profit. At the same time, in the previous announcement, the environmental protection business promised net profits of 17.99 million yuan, 28.02 million yuan, 29.32 million yuan and 33.88 million yuan respectively from 2015 to 2018. The company's intelligent grinding robot and environmental protection business are growing well, and its development is expected to exceed expectations.

(4) installation and maintenance accounts for 20%; Belt and Road Initiative will continue to add code.

The proportion of the company's installation, maintenance and overseas business revenue will increase steadily. The company maintained a high level of 20% of installation and maintenance revenue in the first half of 2015. The company's annual report clearly states that it will continue to improve the layout of domestic and foreign markets in 2015, consider trying to set up elevator production plants and logistics factories in overseas mature areas, and further strengthen the layout of installation and maintenance in the domestic market. speed up the R & D and listing of new products for high-speed and energy-saving elevators.

In March 2015, the company set up branches in Guangzhou and India. It was previously announced that it would cooperate with the Ministry of Housing of C ô te d'Ivoire to build indemnificatory housing. At the end of September, the Memorandum of understanding on Construction and Sale of Housing in C ô te d'Ivoire was signed, which is expected to bring revenue of 20-3 billion yuan. In addition, it will also acquire Germany's "Schuler-Benz" company and invest in the 50MW wind power project in Pakistan. We judge that the company will continue to increase Belt and Road Initiative in the future.

(5) Broad Group has good prospects for nuclear power equipment and intelligent drip irrigation technology, and the company will benefit.

Shenyang Broad Enterprise Group, which is controlled by the actual controller of the company, is strong, with an income of 12.67 billion yuan and a net profit of 1.64 billion yuan in 2014. Shenyang Broad Group has high-end manufacturing, precision agriculture, science and technology environmental protection industry, technology industry and other industries; its AP1000/CAP1400 nuclear main pump frequency converter (nuclear power equipment), precision agriculture, intelligent drip irrigation technology has a good market prospect. The company is currently the only A-share capital operation platform of Shenyang Broad Group and is expected to fully benefit in the future.

3. Investment suggestion

Regardless of this acquisition, it is estimated that the company's EPS in 2015-2017 will be 0.210.25max 0.31 yuan, and the corresponding PE is 52-45-36 times. If the performance of robots and environmental protection is taken into account, the net profit in 2016 is expected to be close to 300 million yuan, corresponding to 36 times PE. As the only A-share capital operation platform of Shenyang Broad Group, the company may have multiple themes in the future, such as "made in China 2025", Industrial 4.0 (intelligent robot), environmental protection, military industry, nuclear power, northeast revitalization, Belt and Road Initiative and so on. Maintain the recommended rating.

Catalyst: breakthroughs in large orders, robot and environmental protection industries. Risk: real estate policy risk, elevator safety accident.