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Acquired a 36% stake in Jiangsu Yiming, and achieved remarkable progress in environmental business expansion

Westdollar.com November 08, 2018 00:00 Guosheng Securities Summer, He Yaxuan View original PDF

Su Cross Section (300284)

Event: The company announced that it will acquire a 36% stake in environmental testing company Jiangsu Yiming at a tentative price of 72 million yuan. After the completion of the acquisition, it will hold 51% of its equity. At the same time, Nanjing Engineering Testing and Consulting Co., Ltd. will be established as a group R&D and production base to build an international R&D center. And test the cloud data center and the EPTISA Asia Pacific production center to enhance the R&D technical strength in the field of environmental testing and engineering consulting.

Significant progress in environmental business development is expected to continue to benefit from the wave of eco-environmental industries. Jiangsu Yiming's main business is environmental protection testing technology consulting and services. In 2017 and 2018, the revenues were 25.12 million and 48.32 million, respectively; net profit was -6.16 million and 8.26 million respectively; The performance promise is that the net profit in 2018 is not less than 16.67 million, the compound growth rate of net profit in 2018-2020 is not less than 30%/year, and the accumulated net profit in three years is not less than 66.51 million yuan. In recent years, with the continuous improvement of national environmental management requirements, the demand for environmental protection investment and testing has grown rapidly. At present, the company's domestic environmental business is mainly concentrated in environmental impact assessment and a small amount of testing business. After the completion of the acquisition, the company is expected to significantly enhance the integration of environmental testing, environmental consulting and environmental remediation capabilities, and is expected to fully benefit from the eco-environment industry wave in the future.

TestAmerica's equity transfer was successfully completed, significantly releasing funds for overseas business risk recovery. Recently, 100% equity of the company's transfer subsidiary TestAmerica was completed, and the cash recovery was adjusted to US$144 million according to the “zero cash, zero liability” trading principle. As of the end of August, TestAmerica achieved revenue of 970 million yuan and net profit of -20.91 million yuan. It is expected that the transfer will have less impact on the company's full-year profit, and it will help the company to reduce its operations in the current international trade friction and domestic tight credit environment. Certainty, quick return of cash.

The direction of stable infrastructure growth is clear, and the company is expected to take the lead in design planning. In response to the downward pressure on the economy, the recent Economic Work Conference of the Politburo once again emphasized the implementation of active finance and the work of “six stables”. The State Council issued the No. 101 document to maintain the infrastructure to fill the shortcomings. Under the strong promotion of the policy, infrastructure credit is expected to accelerate further, and the stable infrastructure policy is expected to gradually produce results. Design companies as the front end of the infrastructure industry chain are expected to benefit first, and the future is expected to continue to grow rapidly.

Investment suggestion: We forecast that the net profit of the company's returning home in 2018-2020 is 5.6/6.9/850 million yuan, up 21%/23%/23% year-on-year, corresponding to EPS of 0.69/0.85/1.04 yuan, 2017-2020 The annual CAGR is 22.1%. The current stock price is 14/11/9 times corresponding to PE, maintaining a “Buy” rating.

Risk Warning: The infrastructure policy falls below the expected risk, and the acquisition integration is less than the expected risk.

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Sujiake fundamental data
  • Total share capital of 810 million shares
  • Circulating shares 521 million shares
  • Earnings per share 0.45 yuan
  • Undistributed profit per share 2.28 yuan
  • Net assets per share 4.96 yuan
  • Return on equity 9.50%
  • Net profit 36,599,300
  • Net profit growth rate 20.16%
Su Jiaoke Investment Rating
Overall rating in January
Overall rating in March
Statistical period Buy Overweight neutral Reduction Sell total
Within one month8400012
Within three months9500014
Within six months167000twenty three
Within a year25900034
Su Cross Profit Forecast
                                index 2017A 2018E 2019E 2020E
Earnings per share (yuan) 0.57 0.71 0.87 1.07
Net profit (100 million yuan) 4.64 5.72 7.05 8.64
name Quote change Number of research reports Institutional investment rating (nearly six months)
Buy Overweight neutral Reduction Sell
Donghu High-tech 10.02% 0 0 0 0 0 0
Zhejiang Jiaoke 7.25% 3 1 2 0 0 0
Su Jiaoke 2.34% twenty one 13 8 0 0 0
Xianglong Electric Industry 2.34% 0 0 0 0 0 0
Oriental new star 2.04% 0 0 0 0 0 0
Donghua Technology 1.99% 2 1 1 0 0 0
Yongfu shares 1.92% 0 0 0 0 0 0
Chinese chemistry 1.79% 19 14 5 0 0 0
Sent shares 1.79% 0 0 0 0 0 0
Jianke Institute 1.02% 0 0 0 0 0 0
Jianyan Group 0.87% 4 4 0 0 0 0
Longjian shares 0.83% 1 1 0 0 0 0
Zhengping Shares 0.81% 2 1 1 0 0 0
High-tech development 0.76% 1 0 1 0 0 0
Daan shares 0.67% 0 0 0 0 0 0
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