Main points of investment:
The vice president's promise to increase his holdings began to be fulfilled, highlighting the company's senior management's confidence in the company's future development, and the current share price is still attractive.
Event: on May 12, the company received a notice from Ms. Yan Dongmei, vice president of the company. Yan Dongmei intends to purchase or increase the company's shares through Jiujiuyi Asset Management Co., Ltd. by subscribing to the No. 3 Jiuyi income swap fund set up by Shenzhen Jiujiuyi Asset Management Co., Ltd., in accordance with the "announcement on the commitments of Directors, Independent Directors and executives to increase their shareholdings in the Company" issued on March 2. Yan Dongmei subscribed for Jiujiuyi No. 3 fund with self-raised funds of 30 million yuan, and entrusted Jiujiuyi to carry out professional investment management through the income swap contract signed with Guoxin Securities. Guoxin Securities buys shares of the company that are publicly traded on the secondary stock market through the Shenzhen Stock Exchange. In the stock income swap transaction, Guoxin Securities provided financing funds of 60 million yuan.
The vice president's promise to increase his holdings began to be fulfilled. The company announced on March 2, 2015 that Ms. Yan Dongmei, vice president, plans to increase her holding of 0.1% of the company's shares (30.197-3.0197 million shares) in the next six months. Ms. Yan Dongmei's self-raised subscription for Jiujiuyi No. 3 fund is the actual action after the commitment to increase its holdings on March 2, and the increase under the current stock price highlights the confidence of the company's senior executives in the future development of the company.
The actual controller makes a commitment to increase the holdings. Jia Quanchen, Jia Yulan, Jia Xiaoyu and Dai Yiming (son of Jia Yulan) signed a concerted actor agreement on April 30, 2015, and promised that within 12 months from the date of signing of the "concerted Action Agreement", Jia Quanchen and his concerted actors Jia Yulan, Jia Xiaoyu and Dai Yiming will increase their shares in the company by no more than 2%, and will not reduce their holdings in the company.
The increase of executive holdings is in progress. As of May 7, 2015, in addition to Vice President Yan Dongmei, Supervisor Yingming, Director Jia Yulan, Dong Dong Yao Gang, and du Dong Wang Tianwen have all made commitments to increase their shareholdings in the company. Among them, Ying Ming promised to increase the company's shares by no more than 0.1% (30.20-6.0394 million shares), while Jia Yulan, Yao Gang and Wang Tianwen promised to increase their holdings by 0.1% (30.20-3.0197 million shares). As of May 12, 2015, Ying Ming, Jia Yulan, Yao Gang and Wang Tianwen had increased their holdings by 1.69%, 0.76%, 0.69% and 0%, respectively.
The great increase in performance highlights the potential for development. The company's quarterly report predicts that it will make a profit of 1.77-187 million yuan in the first half, an increase of 1058-1123% over the same period last year. The company's profit has increased greatly compared with the same period last year. The main reasons are: (1) the large contracts signed in 2014 will continue to contribute to the company's profits. At present, orders are being executed for about 1 billion yuan. According to the production plan, the semi-annual output value will increase significantly over the same period in 2014, which will greatly increase the net profit belonging to the shareholders of listed companies. (2) it is estimated that the non-recurrent profit and loss of the company during the reporting period is 1.03 million yuan, compared with 900000 yuan in the same period in 2014.
Maintain a "buy" investment rating. The company relies on the Indonesian nickel iron industrial park project to integrate Indonesian mineral (coal, nickel) and power plant resources to create a complete nickel industry chain; at the same time, the company will take the Indonesian industrial park project as the starting point to continue to open up the overseas sales market of complete sets of machinery and equipment. It is expected that business orders and sales revenue will continue to increase in 2015, and the performance will maintain rapid growth. According to the company's performance and project progress, the company's EPS in 2015-2016 is expected to be 1.31 yuan and 2.27 yuan respectively. Combined with the average valuation level of the nickel sector and the promotion of the company valuation level by "Belt and Road Initiative", we give the company a target price of 78.88 yuan, corresponding to 60 times PE in 2015, maintaining a "buy" rating.