Main points of investment:
The leading enterprise of power transmission and transformation equipment, the armor group is the actual controller. The company is mainly engaged in the manufacture and sales of large-scale power transformers and accessories, and its leading products are 220kV-100kV ultra-high voltage and large capacity transformers. It has strong strength in the field of high voltage and large capacity transformers, and its technical level is leading in China. The controlling shareholder of the company is Armament Group, with a total shareholding of 56.43%. The Armament Group is a backbone enterprise directly managed by the central government, and its business covers four major sectors: special products, vehicles, new energy and equipment manufacturing. In 2015, the Armament Group has a revenue of 438.6 billion yuan and a net profit of about 29.6 billion yuan.
"focus on the main business of power transmission and transformation" and get back on track. In 2012, the company extended into the field of photovoltaic and wind power. In 2012, due to the international market environment and other problems, the industry overcapacity, product prices fell sharply, the company's business was greatly affected, and the company suffered large losses in 2012-2013. In 2013, through non-public issuance and other means, the company adjusted its development ideas and spun off the assets of the new energy industry one after another, and its main business focused on the main business of "power transmission and transformation". The company returned to the right track and turned losses into profits in 2014.
Basic information of the non-public offering plan: recently, the company announced the revised draft of the non-public offering plan, raising no more than 1.451 billion yuan for the acquisition of 54.97% shares of Yunlian Electric, repayment of financial institution loans (600 million yuan), replenishment of liquidity, and so on. Among them, the Armament Group plans to subscribe with 1.125 billion yuan in cash; Shanghai Changwei plans to subscribe with its 54.97 percent stake in Yunlian Electric, and the trading price of Yunlian Electric's 54.97 percent stake is set at 326 million yuan.
Acquire the equity of Yunqian Electric & improve the capital structure. The company is in the leading position in the field of traction transformer in electrified railway. In 2015, the revenue was 757 million yuan and the net profit reached 31.28 million yuan. After the completion of the acquisition, it will give a certain boost to the performance of listed companies. At the same time, this fund-raising will have a very positive impact on improving the company's profitability and operational stability, and is expected to save the company more than 28 million yuan in financial expenses. The asset-liability structure will also bring positive improvement. In 2016, the company's asset-liability ratio is 93.43%. After the completion of the issue, it is expected to reach about 80.28%.
It is expected to benefit from the construction of Xiongan New area. The planning scope of Xiongan New area covers Xiong County, Rongcheng County, Anxin County and some surrounding areas in Hebei Province. The starting area is about 100square kilometers, the medium-term development area is about 200square kilometers, and the long-term control area is about 2000 square kilometers, which has great potential for future development. Baozhou Electric is one of the few listed companies in Baoding and is expected to benefit.
Profit forecast and investment advice. Without considering the asset injection, we estimate that from 2017 to 2018, the company's revenue will reach 42.72 yuan and 4.529 billion yuan respectively, and its net profit will reach 1.19 yuan and 132 million yuan respectively, an increase of 9.50% and 10.72% respectively over the same period last year, and earnings per share will reach 0.08 yuan and 0.09 yuan respectively. Due to the problem of transformation, the company will not be rated temporarily because of business climbing.
Risk hint. Policy risk.
