1. air quality monitoring field: the first river environmental protection (300137), spotlight science and technology (300203), Tianrui instrument (300165), Xuedilong (002658) and so on.
2. Dust management field: Longjing Environmental Protection (600388), Colin Environmental Protection (002499), three-dimensional silk (300056), Fidelity Environmental Protection (600526) and so on.
3. Sulfide, nitrogen oxides management field: combustion control technology (300152), Longyuan Technology (300105), Kowloon Electric Power, Guodian Fresh (002573), Yongqing Environmental Protection (300187) and so on.
4. Air purification field: Chuangyuan Technology (000551).
Cedrol: growth continues to be strong, the layout of the wisdom of environmental protection to open up a new space for growth
Event: 15Q1 the company realized net profit of about 29.3 million yuan, an increase of 45.80% year-on-year; basic earnings per share of 0.05 yuan. At the same time, the company expects net profit growth in the first half of 2015 between 40% and 75%. In addition, the company announced the major shareholders, the actual controller of the share reduction plan, intends to reduce no more than 30,244,000 shares, the proceeds of funds will be used to provide interest-free loans for the company's employee stock ownership plan, shareholders' personal investment and other capital needs and other purposes.
Review:
Industry boom led to a substantial increase in revenue
In the first quarter, the company realized revenue of about 158 million yuan, an increase of 64.42% year-on-year, mainly due to the country's environmental protection industry investment continues to increase, the environmental monitoring industry is in the boom cycle, at the same time, the company by actively expanding the market, so that the increase in business orders and increase in revenue from the sale of products. At present, small and medium-sized industrial boiler flue gas market is accelerating the outbreak, at the same time, the ultra-low emission policy to promote thermal power flue gas market continues to expand, we believe that, relying on the core competitive advantages, the company's fist product CEMS system sales are expected to continue to increase, and will continue to drive the company's performance to achieve faster growth.
Excellent cost control, profitability level slightly increased
In the first quarter, the company's sales and management fee rate of 14.0% and 13.4%, respectively, year-on-year reduction of 3.6 percentage points and 1.8 percentage points; the period fee rate of 26.1%, a year-on-year reduction of 5 percentage points. With large environmental protection engineering contractors and end customers to establish a long-term solid relationship with the market development mode, coupled with strict control of expenses, the company in the cost control to maintain the industry's leading level. In addition, the company's consolidated gross profit margin for the first quarter was 46.8%, an increase of 1.7 percentage points over the same period last year, showing that the company's profitability has been enhanced.
Layout of intelligent environmental protection, open up a new space for growth
The company joined hands with Idea Innovation to enter the field of intelligent environmental protection by taking advantage of both parties' strengths in hardware and software as well as other resources, and at present the first project of the Datong Intelligent Environmental Protection Informationization Platform Construction has entered the implementation stage. We believe that with the successful demonstration of the Datong project, the new business model is expected to realize rapid off-site replication in the future, and the intelligent environmental protection business will also open up a new broader space for the company's sustained growth. In addition, the company recently established a joint venture with the idea of innovation, water and wood Yangfan big data company, the layout of the Internet + environmental data services, which will be conducive to further enhance the company's competitive strength in the field of intelligent environmental protection, or will accelerate the advancement of intelligent environmental protection business.
Profit forecast
We believe that the iron fist pollution control will become the new normal of environmental protection. Environmental governance, monitoring first, with the comprehensive and in-depth promotion of pollution control, environmental monitoring industry will usher in more development opportunities. The company y understands the development trend of industry changes, forward layout VOCs governance, ultra-low emissions, intelligent environmental protection, environmental third-party operation and maintenance of trendy areas, with strong technical strength, rich product reserves and good brand effect, the company's future is expected to continue to maintain the position of a leader in the field of environmental monitoring. In addition, the implementation of the employee stock ownership incentive plan will also help the company to achieve steady growth in performance in the medium and long term.
Risk tips
1) CEMS sales growth is less than expected;
2) Intelligent environmental protection and other new business market development is lower than expected;
3) industry competition intensified to business gross margin decline.
GuoDian Fresh: technology advantage to lead the ultra-low emission market
Results in line with expectations: the company released its 2014 annual report, realizing an operating income of 1.277 billion yuan, an increase of 66.9% year-on-year, and net profit of 271 million yuan, an increase of 50.3% year-on-year, and achieving basic earnings per share of 0.51 yuan, to be Cash distribution of 2 yuan per 10 shares (tax included), while the capital reserve to increase share capital by 10 shares per 10 shares.
Desulfurization and denitrification business boosts high growth: the high growth in revenue mainly comes from the increase in revenue from construction and operation business of desulfurization and denitrification (up 160.66% and 33.88% year-on-year, respectively), the company consolidates the EPC construction business on the basis of the company's active expansion of the BOT franchise projects, the company in 2014, the company took over 2 new operation projects and more than ten construction projects, the company. At the same time, the existing eight desulfurization and denitrification operation projects will also bring the company sustained and stable income. Net profit growth rate is lower than the revenue growth rate is mainly due to the following reasons: 1) comprehensive gross profit margin of 33.99%, a year-on-year decline of 2.19pct, mainly due to a decline in the proportion of revenue from operations with higher gross profit margins; 2) during the period the cost rate rose 1.43pct year-on-year, mainly due to the increase in R & D investment by 79.7%, leading to a rise in the rate of management expenses of 1.54pct.
Continuously optimistic about the future development space: 1) the company has undertaken two new operational projects and more than 10 construction projects. Future development space: 1) technological advantage to lead the ultra-low emission market: the company has successfully developed a single-tower integrated desulfurization and dust removal depth purification technology in 2014, which is able to provide an integrated solution for the efficiency transformation of the existing units and the realization of ultra-low emission of sulfur dioxide and dust in the new units, and the technology has been successfully applied in the efficiency transformation of the flue gas purification of several power plants and passed the ultra-low emission acceptance of Shanxi Environmental Protection Department. Emission acceptance, the future will continue to benefit from the improvement of air pollutant emission standards brought about by the transformation and new market demand; 2) and Jun shares, the establishment of industrial mergers and acquisitions fund, for the capital operation to provide experience and resources; 3) equity incentives to enhance operational efficiency, high exercise conditions (2015-2017 deducted net profit CAGR of up to 55%) highlights the performance of the confidence of the employee stock ownership plan to improve the cohesion of the team. cohesion.
Investment advice: we expect the company's 2015-2017 EPS were 0.95 yuan, 1.38 yuan and 1.90 yuan, corresponding to PE 39.2 times, 26.8 times and 19.5 times, with the establishment of the industry fund, is expected to be the possibility of the company's future expansion of epitaxial expansion is expected to be an over-expectation performance.
Risk warning: competition intensification, project progress is lower than expected, customer payment risk.
Sunde environment : nationalization brings new opportunities
Event: the company's controlling shareholder Sunde Group intends to Tsinghua Holdings, Qidian science and technology services, Qingzhong assets, Jinxin Huachuang agreement transfer of its holdings of the company's 252 million shares (accounting for 29.80% of the company's total share capital), of which Tsinghua Holdings, Qidian science and technology services, Qingzhong assets and Jinxin Huachuang For concerted action, the transaction amounted to 6.991 billion yuan, after the completion of the equity change, the actual controller of the company changed to Tsinghua Holdings, Sund Group still holds 15.01% of the shares of the company.
Investment highlights
The company is a leading solid waste disposal enterprise, and its industrial layout is becoming more and more complete. By 2014, the company's business has covered solid waste disposal engineering construction, solid waste project operation, sanitation integration, renewable resources, as well as environmental protection equipment manufacturing, water operation and other fields. Among them, solid waste engineering has been the company's main source of income, in 2014, the company realized municipal construction and environmental protection equipment installation revenue of 3.566 billion yuan, accounting for 82% of the total revenue; in 2013, the company's solid waste disposal BOT project began to generate income,14 the business income jumped to 400 million yuan; sanitation integration is the company's new business in recent years, by the end of 2014, the company has achieved sanitation and transportation projects with an annual contract value of 300 million yuan. By the end of 2014, the company had obtained an annual contract amount of about 300 million yuan for sanitation and transportation projects; the development space of the renewable resources industry is huge, and the company has completed a preliminary layout in the field of home appliance dismantling. It can be seen that in the field of solid waste disposal, the company has formed a complete industry chain of preliminary engineering construction, medium-term garbage removal, and later treatment operation and recycling, and has a more solid market position in the industry.
Tsinghua Holdings of the state-owned background or for the company to win greater development opportunities. Tsinghua Holdings is Tsinghua University in the integration of Tsinghua science and technology industry on the basis of the approval of the State Council, funded the establishment of a wholly state-owned limited liability company, mainly engaged in the industrialization of scientific and technological achievements, high-tech business incubation, investment management, asset management and capital operation, etc., invested in the enterprise's operating areas include information technology industry, energy and environmental protection industry, life science and technology industry, scientific and technological services and knowledge-based industry, etc. At present, Tsinghua Holdings directly or indirectly. At present, Tsinghua Holdings directly or indirectly holds listed companies including Tongfang, Chengzhi and Ziguang.
Tsinghua Holdings said that "there is no plan to change the company's main business or make significant adjustments to the company's main business, but does not exclude the company in the next 12 months to adjust the industrial structure at the right time, to open up new business, improve the company's sustained profitability and overall competitiveness". Currently, Tsinghua Holdings' energy and environmental protection industry mainly involves the development and utilization of new energy, clean combustion and sewage treatment, utilization of geothermal resources, and energy-saving technologies such as intelligent air-conditioning etc. In 2011, Tsinghua Holdings' total revenue was RMB 36.3 billion, of which energy and environmental protection industry revenue accounted for 10.69%. Its environmental protection enterprises include Longjiang Environmental Protection Group, National Environmental Tsinghua Environmental Engineering Design and Research Institute, and Ziguang Taihetong Environmental Protection. Among them, there are nearly 20 subsidiaries under the jurisdiction of Longjiang Environmental Protection Group, with a water treatment capacity of over 2.7 million cubic meters per day. According to the development strategy of Tsinghua Holdings, the future will vigorously develop the environmental protection business sector, using the listed company platform to effectively integrate the environmental protection industry resources, and realize the synergistic effect of industrial development.
It can be expected that Tsinghua Holdings will give strong support to the company in business development, platform integration, etc., and the company is expected to usher in a major, jumping development opportunities.
Profit forecast and investment rating. Considering only the development trend of the company's existing business, we expect the company's 2015/2016/2017 operating income of 5,905/77.95/10,133 million yuan, net profit attributable to the parent company of 1,085/1,411/1,834 million yuan, corresponding to the EPS of 1.28/1.67/2.17 yuan respectively. We will give 25-28 times PE in 2016, and target price range of 41.75-46.76 yuan in the next 6-12 months.
Risk warning. The company's BOT operation projects are rapidly increasing, slow cash flow, may lead to financial risk.
Long net environmental protection: stable growth of the atmosphere benchmark stock
Conclusion: the company has the flue gas treatment technology and other aspects of the advantages, will benefit from the policy of ultra-low emissions; in addition, the company has accumulated experience in overseas projects, divestment of non-primary business, and promote incentive programs. It is expected that the 2015-2017 EPS will be 1.30, 1.54, 1.85 yuan, 2015, 2016 than the previous forecast up 2%, 16% respectively. Considering the company's advantages in technology, brand, channels, etc., combined with the 2014 high transfer proposal, the company should enjoy a certain valuation premium. With reference to the average valuation of the environmental protection industry, the company was given 35 times PE in 2016, and the target price was adjusted upward to 53.9 yuan;
The company will benefit from the ultra-low emission policy. As early as 2012, the company has Henan, Anhui million units dust removal large orders; up to now, the company has wet electric precipitator, low temperature electric precipitator and other ultra-low emission mainstream technology, has the relevant performance, brand, channel advantages, will benefit from the ultra-low emission policy;
Layout of the flue gas BOT field, with overseas project experience, divestment of non-primary business (increase net profit + focus on the main business ), and implement internal incentives. (1)The company has been awarded BOT projects in 2008, and newly signed a BOT project of 2.350MW self-provided thermal power plant of Xinjiang TBEA in 2012. The flue gas of the project has low sulfur content, the utilization hours of cogeneration are guaranteed, and the BOT project can provide stable income; (2) From 2010 to 2012, the company signed orders for power and boiler island with Indonesia and India respectively. Currently, the projects are near completion, and the overseas EPC business has contributed RMB 490 million to the company's operating income in 2014; (3) In 2013-2015, the company sold shares of Industrial Bank, Guangzhou Development shares, and land of Ximing Environmental Protection respectively. The above business contributed operating income of RMB 130 million to the company in 2014; (4) In September 2014, the company issued an employee stock ownership plan. At present, the first phase of the purchase has been completed, and the second phase is being steadily implemented;
Risk factors. Fierce competition in the ultra-low emission market, etc.
Fidelity Environmental Protection: non-public offering was unconditionally passed by the SFC, a new round of growth opened
Event: Fidelity Environmental Protection announced in the evening of January 7, the Commission of the Securities and Futures Commission issued a review of the company's application for the non-public issuance of A-share stock. According to the results of the audit, the company's application for non-public offering of A-share stock was unconditionally approved. According to the previous disclosure, Fidelity Environmental Protection intends to raise no more than 1.2 billion yuan from the non-public offering of shares to Juhua Group. The proceeds, after deducting issuance costs, will be used to acquire 100% of the equity of Jutai, 100% of the equity of Qingtai and to supplement working capital. After the completion of the fixed increase, Fidelity environmental protection controlling shareholder will be changed to Juhua Group, the actual controller will be changed to the zhejiang provincial state-owned Assets Supervision and Administration Commission.
Investment highlights:
The "boots on the ground" of the fixed-price increase will boost the company to start the pace of integration of environmental protection business in Quzhou.
We speculate that the cooperation of the two state-owned enterprises or an important part of the reform of state-owned enterprises in Zhejiang Province, the chairman of the group is also the mayor of Quzhou City, there is reason to believe that the approval of the fixed-price increase means that the company opened the integration of environmental protection business in Quzhou City in the pace of the current Qingtai, Jutai environmental protection business is mainly involved in relying on the group to get involved in the city of Quzhou. Qingtai currently has 2000 tons of medical waste / year, 6000 tons of hazardous waste / year treatment qualification, the actual utilization rate of about 40%.
It is expected that with the subsequent expansion of production capacity "two wastes" processing volume will be in the existing 3,000 tons / year on the basis of rapid growth in the next few years is expected to reach more than 10,000 tons / year to meet the existing level of Quzhou about 20,000 tons / year of hazardous waste discharge, sewage sludge processing volume is also expected to benefit from the "ten articles" landing rapid growth in the "water". The volume of sewage sludge treatment is also expected to benefit from the rapid growth of the "Ten Articles on Water". According to 3000 yuan / ton of "two wastes" treatment fee and 1.5 yuan / ton of sewage treatment fee we expect Jutai, Qingtai 14 years will maintain the existing treatment volume unchanged combined contribution to the net profit of about 18.7 million, 15 years from the start of the disposal of hazardous waste, sewage treatment projects will continue to land, hazardous waste, sewage treatment capacity is expected to rapidly double, the treatment unit price will be increased. Doubling of hazardous waste, sewage treatment capacity is expected to rapidly double, the unit price of treatment will be improved, driving the company 15-16 to realize net profit of more than 200% compound growth.
Thermoelectricity "ultra-low emission" project to accelerate the landing, driving the company to accelerate orders.
October national coal power energy saving transformation and upgrading action plan for the first time clear ultra-low emission feasibility, put forward to 2020 to complete 150 million kilowatts of ultra-low emission renovation target. 14 years subject to the economic feasibility of technological transformation of the debate, the project to a small range of demonstration projects in the form of a gradual promotion, the company in the second half of 14 years, the successful completion of the god of China zhou shan power plant unit 4 renovation shows the company's ability to undertake ultra-low emission projects. The successful completion of Shenhua Zhoushan Power Plant Unit 4 renovation in the second half of 2011 demonstrated the company's ability to undertake ultra-low emission projects. Policy follow-up and maturity of the technology makes us believe that 15 years will become a coal power ultra-low emission transformation of the year, 16 years the market reached a comprehensive peak, leading to the future of about 50 billion new thermal power ultra-low emission flue gas treatment market. The company with its core technology wet electric precipitator fast beach Jiangsu and Zhejiang region market, with demonstration projects in the breakdown of dust ultra-low emission transformation market share of more than 50%. It is expected that the company's 15 years of thermal power ultra-low emissions orders will be explosive growth, driven by the company's traditional flue gas treatment business growth, the annual flue gas treatment business is expected to exceed 7 billion total orders, orders to continue to accelerate.
Maintain buy rating.
The company is located in the energy saving and environmental protection industry in the golden period, the future space is huge. From last year, the company's capital pressure eases, order acceptance shows accelerated trend. According to the 15 years of additional consolidation estimates, the company's 2014, 2015, 2016 EPS for 0.20, 0.30, 0.52 yuan / share, an increase of 99.52%, 50.00%, 73.33%.
Three-dimensional silk: BOT projects gradually landing, off-take and operation and maintenance works bring new growth in performance.
The company announced: the company and Loka environmental protection and Zouping Qixing Development Zone Thermal Power Co., Ltd. recently signed the "Zouping Qixing Development Zone Thermal Power Co., Ltd. 6 furnace denitrification system investment, construction and operation and maintenance maintenance contract" (hereinafter referred to as "Qixing Development Zone contract").
The total price of the contract is 81.9145 million yuan, with a payback period of five years, of which 61.41 million yuan is for the investment cost of the denitrification system, and 20.5 million yuan for the operation, maintenance and overhaul cost***.
BOT order boots on the ground, the company's substantial transformation into a comprehensive environmental protection service provider of flue gas treatment to speed up the pace. Previously, the company and Loka Environmental Protection has signed a contract with Zouping Qixing Development Zone Thermal Power Co. Ltd. in the amount of about 96 million yuan for the investment, construction and operation, maintenance and overhaul of the decommissioning system, and the contract is in the process of fulfillment. Currently there are three BOT orders in one **** with a total price tag of over 262 million RMB. As mentioned in our previous report, the company's long-term strategy is to gradually transform into a comprehensive environmental protection service provider in the field of flue gas treatment, there will certainly be more BOT projects signed in the future, and the gross profit margin of BOT projects is higher, contributing to the company's performance.
BOT order landing will provide the company with a new profit growth point, help the company's flue gas denitrification field and other business expansion, to promote the company's substantial to the flue gas treatment of comprehensive environmental protection service provider transformation.
The company is in a turning point, the products belong to the core varieties in the field of environmental protection, the acquisition of Loka will bring great synergies. With the tightening of national environmental governance provisions, in the context of building a beautiful China, air pollution prevention and control of key special implementation programs and energy-saving standardization policy launched, environmental issues have been in the wind and waves, the company as a comprehensive environmental protection service provider in the field of flue gas treatment will play a huge role. The company focuses on atmospheric dust pollution remediation, the current high temperature filter media products full production and full sales, with strong bargaining power, the product has a certain market and user stickiness, the future with the synergistic effect and supporting sales, to protect the company's performance growth. Loka environmental protection has a high market position and wide brand recognition, the company will use its smooth entry into the field of flue gas denitrification, is the company's strategic transformation into a comprehensive environmental protection service provider of the important steps.
High-temperature filter media leading enterprises, gradually transformed into a comprehensive environmental protection service provider in the field of flue gas treatment, the first time to give "buy" rating. The company as a domestic high temperature filter media leading enterprises, the future will fully enjoy the release of industry space brought about by environmental protection policies, and at the same time through the acquisition of Loka environmental protection into the field of flue gas denitrification, and gradually to the field of flue gas treatment of comprehensive environmental protection service provider's strategic goal. Assuming that the company acquires Loka environmental protection from 2015 to start contributing revenue, considering the dilution of share capital.
China Electric Yuan Da: "In-depth implementation of the ten articles of the atmosphere" series of research of the fourth - to create a large platform for environmental protection resources gathering
Investment advice: the field of atmospheric treatment is the company's main future growth direction; is expected to be in 2015-2017, the company EPS are 0.60, 0.68, 0.79 yuan respectively. Considering that the company benefits from ultra-low emissions and other "in-depth implementation of atmospheric ten" policy, layout of the water market, with the advantages of the group's resource platform (the future existence of the group's thermal power environmental protection assets injection, nuclear waste disposal and overseas business board to promote the possible), we believe that the company should enjoy a certain valuation premium. Reference to environmental protection plate main business around the atmosphere is mainly comparable companies valuation, we give the company in 2015 60 times PE level, corresponding to the target price of 36.00 yuan.
Atmospheric management field is the company's main growth direction. The promotion of ultra-low emission policy will help the company to realize steady growth; franchise project will provide stable cash flow for the company; the company actively layout of atmospheric governance "non-electricity" field (signed a strategic framework agreement with the Handan Municipal Government), as well as carbon remediation technology, etc. Overall, the atmospheric governance field is the main direction of the company. Overall, the air treatment field is the company's main growth area;
Layout of the water sector in advance. It is expected that "water ten" will be officially introduced in April-May, which will bring considerable investment opportunities in the water sector. The company signed a sewage treatment plant project with the Chaoyang Municipal Government, and set up a project company with the Chaoyang Municipal Government to enter the local water market in the PPP mode, in line with the direction of industry development and policy; at the same time, the company is accelerating the construction of the "water island" demonstration project in the power plant, and is striving to utilize its advantages in air treatment sector to realize the transformation and upgrading of the water sector.
Backed by the Group's resource platform advantage. The company backed by the group's resource platform advantages, the future of the group's thermal power environmental protection assets injection, nuclear waste disposal and overseas business segments to promote the possibility;
Risk factors. Ultra-low emission promotion speed is lower than expected; franchising in the national tariff subsidy transfer payment implementation is insufficient; group support and speed is lower than expected.
Spotlight Technology: to build a large platform for environmental monitoring and governance
Event: the company released its 2014 annual report, realizing operating income of 1.231 billion yuan, an increase of 30.76% year-on-year, and net profit of 193 million yuan, an increase of 21.02% year-on-year, with an EPS of 0.43 yuan, and proposed to pay a cash dividend of 0.45 yuan for every 10 shares. Cash dividend of 0.45 yuan (tax included) per 10 shares. At the same time, the company announced the first quarter of 2015 performance forecast: to achieve net profit of 417.96 million yuan -731.44 million yuan, compared with the same period last year, down 60% to 30%, lower than the market expectations.
Environmental monitoring faster growth, cost control to strengthen: in 2014, the company's main business composition, environmental monitoring system and operation and maintenance services, industrial process analysis system, laboratory analytical instruments, water conservancy and water intelligent system and security monitoring system revenue accounted for 44.18%, 26.71%, 11.65%, 11.19% and 2.80%, respectively, of which environmental monitoring system and operation and maintenance services revenue growth faster than the market. System and operation and maintenance services revenue grew faster (24.73%), and the merger of Dongshen Electronics new intelligent water business. Through the reform of business unit system and equity incentives and other measures, cost control is further strengthened, during the period of the expense rate decreased by 3.87 percentage points compared with the same period last year, of which the sales expense rate of 15.49%, down 3.16 percentage points compared with the same period last year, the management expense rate of 15.83%, down 0.97 percentage points compared with the same period last year, we believe that there is still room for decline, endogenous growth can be expected.
To create a large platform for environmental monitoring and governance: 1) environmental tax and VOCs sewage charging system is expected to be introduced this year, monitoring industry and VOCs prevention and treatment market will be fully opened, the company's environmental monitoring system covers water quality and gas monitoring instruments, R & D + M & A to create the most complete product line, forward-looking layout VOCs monitoring and governance, the future will significantly benefit from the industry development; 2) strategic layout Intelligent city: 2014 acquisition of Dongshen electronics into the wisdom of water conservancy, Zhangqiu City, "intelligent environment" project is expected to create a national "intelligent city" construction model; 3) the acquisition of Xinbaili, from the monitoring of the water environment to the governance, extension of the environmental protection industry chain, towards the construction of a large platform. platform building.
Risk Warning: The introduction of policies lower than expected, project progress is lower than expected, accounts receivable risk.
Qiyuan equipment: "in-depth implementation of the ten articles of the atmosphere," one of the series of studies: leveraging the advantages of the group platform, embarking on the road of environmental protection sunshine
Investment advice: based on the company's existing performance, with the help of the six days of the Rong in the field of environmental protection of the core technology, customers and channel Resources, the company in the transformation speed and strength or are significantly better than the industry average. It is expected that in 2015-2017, the company's operating income of 305, 351, 407 million yuan, net profit of 0.12, 0.15, 0.19 billion yuan, EPS of 0.10, 0.12, 0.15 yuan (if the restructuring plan successfully passed, EPS is expected to be 0.73, 0.85, 0.97 yuan).
Considering the company's current performance level, the future business transformation is expected to take advantage of the proposed merger of the subject company Liuhe Tianrong, and the existence of the group's asset injection is expected, we believe that the company can enjoy a certain valuation premium, corresponding to the target price of 60 yuan, the first time to cover the "hold" rating;
The company to issue shares to buy 100 percent of the shares of Liuhe Tianrong, the way to buy 100 percent of the shares of Liuhe Tianrong. The company to issue shares to buy 100% of the shares of Liuhe Tianrong. The counterparty for China Energy Conservation and other five companies; transaction price of 940 million yuan; the issue of 52 million shares; issue price of 18.03 yuan / share; 2015-2017 company profit forecasts were 0.8, 0.9, 100 million yuan;
Company based on strategic development needs to introduce the acquisition program, exceeding the market's expectations. The traditional business operating income and net profit level is not high, gross profit margin has declined; rely solely on their own accumulation (new denitrification catalyst) is difficult to complete the transition in the short term. The subject of the proposed acquisition of Liuhe Tianrong has been signed and not implemented and not implemented the remaining revenue of the contract 560 million yuan, 2.4 times the company's revenue in 2013, and Liuhe Tianrong actively layout "intelligent environmental protection", in line with the national industrial policy guidance; the company's backing of the China Energy Conservation, do not rule out the possibility of its future with the help of existing listed companies to carry out the platform for asset Possibility of integration. The state has introduced policies related to atmospheric control will promote the business development of Liuhe Tianrong;
Risk factors. (1) the decline in demand for atmospheric management; (2) fierce market competition affects the performance of the six skyrong; (3) the progress of intelligent environmental protection agreement is lower than expected; (4) the group's asset injection is less than expected.