In the first quarter of 2014, the company achieved operating income of 577 million yuan, an increase of 26.96% over the same period last year, operating profit of 19.39 million yuan, an increase of 171.58% over the same period last year, net profit belonging to the parent company of 15.25 million yuan, an increase of 155.89% over the same period last year, and earnings per share of 0.08 yuan.
Orders were released smoothly and business grew steadily. The company is a leader in the dust removal industry. Last year, the domestic new dust removal business orders increased by 95.76% compared with the same period last year. The current order has been smoothly transformed, and the revenue scale has increased steadily. From 2014 to 2015, there are still about 350 million kilowatt units in need of dedusting transformation in China. The policy gives dedusting electricity price subsidy of 0.2min / degree, which to a certain extent increases the enthusiasm of enterprises for transformation. The dedusting industry is expected to continue the rapid development of 2013, and the company's market share is about 17%. Will fully benefit from the high prosperity of the industry.
The profitability has improved and the net profit has increased rapidly. Benefiting from the fall in the price of raw materials such as steel, the company's comprehensive gross profit margin rose 1.49 percentage points year-on-year to 17.04%, which is at a higher level in the past two years. Over the same period, the expense rate fell 0.49 percentage points year-on-year to 13.13 per cent. The sharp increase in net profit is mainly due to the low base last year and the improvement of the company's profitability.
Directional additional issuance, the introduction of Juhua Group. The company announced a non-public offering plan in January this year, which intends to issue no more than 63.16 million shares to Juhua Group and raise no more than 1.2 billion yuan to acquire 100% equity in Jutai and Qingtai, a subsidiary of Juhua Group, and to build a waste incineration BOT project (1200t/d). After the completion of this acquisition, the company's business scope will be expanded from the atmosphere to sewage and solid waste treatment, achieving full coverage of the three major areas of environmental protection. The actual control of Juhua Group is Zhejiang SASAC, and the successful introduction of Juhua Group will further enhance the background of the company's shareholders. At present, the net interest rate of atmospheric environmental protection equipment of the company is only 2%. If the sewage and solid waste treatment business is introduced in the form of BOT in the later stage, the profitability of the company will be greatly improved, and the acquisition of funds and projects is expected to be fully supported by major shareholders.
Profit forecast and investment rating. Leaving aside the IPO plan for the time being, the company's earnings per share from 2014 to 2016 are expected to be 0.31,0.38 and 0.46 yuan respectively. Based on the latest closing price of 19.07 yuan, the corresponding dynamic P / E ratios are 62 times, 50 times and 41 times respectively. Maintain the company's "overweight" investment rating.
Risk hint: the demand for the transformation of dust removal equipment is released slowly.