Core viewpoints
Established manufacturing enterprises, leading industrial waste heat boilers, have maintained the first market share in China for a long time, the number of orders and profit margins have remained stable for a long time, benefiting from the national energy saving and emission reduction policy, the performance will maintain sustained and steady growth for a period of time in the future.
The gross profit of large and special material pressure vessels has declined due to the influence of oil and gas boom, but the company's performance has improved in the past 15 years. Due to the impact of the prosperity of the oil and gas industry and the tightening of national industry policies in the past two years, market competition has intensified, resulting in a decline in gross profit margin and a decrease in new orders.
However, 15-year performance has improved compared with 14 years, with completed income of about 550 million, an increase of more than 50 per cent over 14 years.
Nuclear power will be the flashpoint of future performance. New orders signed in the first quarter of 2016 are saturated. We will carry out in-depth strategic cooperation with CGN, CNNC and Shanghai Electric. The product range spans the third and fourth generations of nuclear power.
In line with the promotion of environmental protection policy, it is transforming into an energy-saving and environmental protection industry in an all-round way, entering the field of comprehensive environmental treatment services for the treatment and recycling of pollutants such as solid waste and waste water, and the acquired Laska and Gerry environment is getting better and better. The performance exceeding expectations has become a high probability event.
Valuation and investment advice: we expect the company to achieve operating income of 1.948 billion yuan and 2.63 billion yuan respectively in 2016 and 17, with a net profit of 121 million yuan and 199 million yuan belonging to the parent company; the corresponding EPS is 0.195 yuan and 0.322 yuan respectively, and 37 times and 22 times of the company's 16-and 17-year Pamp E, respectively.