1. Event
The company released its annual report that its revenue for the whole year was 15.1 billion yuan, an increase of 16% over the same period last year, and its net profit was 265 million yuan, up 65% from a year earlier. EPS was 0.298 yuan. The allocation plan is to increase the distribution of 10 shares to 3.5 shares by 0.9 yuan.
two。 Our analysis and judgment
(1) relatively rapid growth of power cables and bare conductors
In 2016, the company had a good momentum of development in power and other major markets: a total of 3.2 billion yuan of contracts were signed in the power market, successfully realizing full coverage of all 27 provincial bureaus of the State Grid and five major power generation groups in China, and successfully developed a number of domestic key and major image projects such as the main venue of the G20 Summit, Beijing-Zhang high-speed railway and Beijing West 1000KV Substation.
The company's income from power cables and bare conductors was 8.3 billion yuan and 5.4 billion yuan respectively, an increase of 26.6% and 13.8% over the same period last year. We believe that the main reason for the increase in demand in the power market is that China has increased infrastructure investment, started a new round of power infrastructure transformation, UHV construction has entered the normalization, and a number of UHV AC / DC line projects will start in 2017. this makes the power equipment industry booming.
Among the main holding subsidiaries, the net profits of Nissin Transmission and Shanghai Anjie acquired in the past two years were 16.61 million yuan and 20.83 million yuan respectively, making a greater contribution, indicating the company's successful operation in extension expansion.
(2) there is much room for the development of aerospace and other high-end equipment market.
In recent years, the company has strengthened to open up the equipment market and high-end market, and has obtained customer orders for equipment cables such as Xugong Machinery, Guangzhou Shipbuilding International, Modern heavy Industry, Yangzijiang Shipbuilding and so on. At the same time, through technology guidance, the products are widely used in aircraft, military industry, warship, marine industry, nuclear power, rail transit and other fields, especially in the field of aerospace, the company and relevant design and research institutes jointly carry out EWIS design, becoming the first and only domestic manufacturer for domestic production and installation. The company's products are also used in Jiuquan Satellite launch Center to contribute to the successful launch of "Tiangong II" and "Shenzhou 11" rockets. We believe that as a professional platform under AVIC, the company will have more room for development in aerospace and other fields in the future.
3. Investment suggestion
It is estimated that the company's earnings per share in 2017 and 2018 are 0.34 yuan and 0.40 yuan respectively, and the current stock price corresponds to 26x and 22x PE. Maintain the recommended rating.
Risk hint: the electricity market is greatly affected by national investment.