Distribution equipment leader strategic layout of energy Internet. The company is the leading manufacturer of domestic power transmission and distribution equipment, and is also one of the earliest enterprises to produce medium voltage prefabricated cable accessories in China. In 2014, the company formulated a three-year development plan, gradually sought to transform its business from manufacturing to operation, and committed to becoming an energy Internet system solution operator.
The inflection point of the traditional main business can be expected. The company is mainly engaged in intelligent power grid business. Since 2015, the company's OEM strategy has been gradually adjusted, and breakthroughs have been made in the regional market. Its power distribution products have won the bid in 16 provinces and bureaus under the State Grid Corporation, including 10 provinces such as Shanxi, Hebei and Heilongjiang. In addition, the Brazilian substation and transmission line project won by a subsidiary of the company has a total budget investment of 493 million yuan and an annual franchise income of 78 million yuan. It is expected that the inflection point of the company's main business performance is coming.
Build an international business operation center. The company acquired 100% equity of Dalian Ruiyou Energy with 109 million yuan. The latter is an integrated enterprise integrating overseas power grid investment and operation, international project contracting, international trade, e-commerce and warehousing, positioning as the international business operation center of Zhongneng. From 2015 to 2017, the promised net profit is not less than 14 million yuan, 21 million yuan and 31.5 million yuan respectively, totaling 66.5 million yuan.
Enter the field of new energy. The company set up Yiguan New Energy to be involved in the photovoltaic industry, with a total investment of 2.8 billion yuan in photovoltaic power station and installed capacity of 350MW from 2015 to 2017, with a total net profit of 236 million yuan. In addition, part-time repair inside and outside the company, respectively through non-public offering (no more than 816 million yuan) and external cooperation to carry out electric logistics and charging network operation business, gradually spread out the strategic layout of the new energy field.
Equity incentives and increased holdings of the general manager show confidence in the future development of the company. On September 1, 2016, the company granted restricted shares to 14 middle and senior managers and core technical (business) personnel with an exercise price of 23.42 yuan. According to the unlocking conditions, the company's net profit from 2016 to 2019 is not less than 30%, 20%, 20% and 20% respectively compared with the same period last year. This move organically combines the interests of shareholders, companies and operators, fully arouses the enthusiasm of the company's management and management, and is a strong guarantee for the company to achieve its performance goals in the next three years.
Profit forecast and rating. The company is a leader in the manufacture of domestic transmission and distribution equipment, and has made breakthroughs in the international and domestic markets since 2015. The traditional main business orders will continue to grow steadily, and the performance inflection point is expected to come; the company builds an international business operation center through the merger and acquisition of Dalian Ruiyou Energy; at the same time, it enters the fields of new energy photovoltaic, electric logistics and charging operation to create energy Internet system solution operators. In addition, the company's timely introduction of equity incentives will protect future performance growth. It is estimated that the company's EPS from 2016 to 2018 will be 0.50,0.62,0.79 yuan respectively. According to the industry average valuation, the company will be given 77 times PE in 2017, corresponding to the target price of 47.74 yuan, and a "buy" rating for the first time.
Risk hint. The main business orders are not as expected, and the expansion of new energy projects is not as expected.