Main points of investment
Event: on October 28, the chairman submitted an interim motion, in order to avoid hostile takeover, the company intends to amend some of the provisions of the articles of association (management compensation, board of directors change conditions, etc.). 2) on November 3, three shareholders Qiu Guoqiang (8.6% shareholding) submitted an interim proposal to remove Luo Xiangbo and Luo Honghua as directors of the board of directors, and nominated Qiu Guoqiang and Zhang Yu as additional directors. 3) on November 14, 2016, the second interim shareholders' meeting was held, and the motion to amend the articles of association was not passed; Luo Xiangbo and Luo Honghua were removed from the board of directors, and Qiu Guoqiang and Zhang Yu were nominated as additional directors.
Our comments on this are as follows:
The chairman is removed, private equity background Qiu always enters the board of directors, minority shareholders may benefit. 1) the chairman was removed, and the new directors have a private equity background: Luo Xiangbo and Luo Honghua currently own 17.3% of the shares, and they are the largest shareholders and real controllers of the company, of which Luo Xiangbo is the former chairman of the company. Qiu Guoqiang, one of the new directors, was the vice chairman, deputy general manager and sales director of Sanwei, and is now the chairman of Zhonglong Hangchuan Investment Fund. Zhonglong Hangchuan currently manages a fund of 6 billion yuan, with investments in mining, energy, new energy and other industries. Zhang Yu, the second new director, is currently the deputy general manager of Shanghai Yongwu Investment Management Department and a director of Wanlishi.
Shanghai Yonghua is under the control of Yongjin Group, with a cumulative investment of more than 6 billion yuan, and has invested in more than 80 outstanding enterprises, of which more than 40 have been successfully listed. 2) short-term reminder of trading opportunities, which is beneficial to the interests of minority shareholders in the medium and long term: the removal of directors is a manifestation of the disclosure of contradictions among shareholders before.
From the perspective of shareholder structure, Luo Xiangbo and Luo Honghua currently hold 17.3% of the shares, while Qiu Guoqiang, the three shareholders, hold 8.6% of the shares. As a result of the vote at the shareholders' meeting, 129 million shares agreed (32% of the total share capital) and 86 million shares opposed (23% of the total share capital). We judge that this management change, multi-party shareholding ratio is close, short-term prompt trading opportunities; after the management structure change, medium-and long-term may be conducive to the interests of minority shareholders.
Sanwei is a transformational company, one after another mergers and acquisitions to increase environmental protection. The company listed in 2010, the main bag filter material; in 2014, the acquisition of Luoka Environmental Protection, into flue gas denitrification; in 2015, the acquisition of Xiamen Porting, the development of bulk material transportation and storage business. We expect the company's net profit to reach 162 million yuan in 2016, of which our bag dedusting business, Luoka Environmental Protection and Xiamen Porting contributed 0.15,0.50 and 97 million yuan respectively.
The first 600 million yuan clean heating order landed, and the establishment of M & A funds accelerated extension. 1) Clean heating order:
In May 2016, the company announced the landing of the biomass thermal power project in Xixia County, Nanyang City, with a total investment of 600 million and a first phase of 300 million. The first phase of the construction of heating boiler 150t/h, supporting generating sets for 24MW back pressure and pumping condensing units and the corresponding pipe network; the second phase of 150t/h, supporting 30MW generating units. In the future, clean heating PPP project is the company's key areas of expansion. 2) accelerated extension of the establishment of M & A fund: the company contributed 120 million yuan to participate in the establishment of 480 million yuan Huaxin-Sanwei environmental protection M & A fund and 100 million yuan to participate in the establishment of 400 million yuan Sanwei-Anjie investment fund to accelerate extension.
Investment advice: maintain the overweight rating. Considering the additional issuance and table, we predict that the 17-year net profit of Sanwei 16muri will reach 170.22 billion yuan; at present, the market value of the preparation for the exam will reach 8.2 billion yuan. Xiamen Po Ting on-hand order of more than 1 billion, performance may exceed expectations. The chairman is removed, private equity background Qiu always enters the board of directors, minority shareholders may benefit.
At present, the company's stock price is 20.55 yuan / share, which is close to 17.71 yuan / share financing price and 19.21 yuan / share holding price. The current price security is strong. Based on this, maintain the overweight rating.
Risk hint: dust removal filter media business is lower than expected