We survey the recent investment advice XJ Electric (000400) with an exchange of assets into the company, State Grid acquisition and production operations.
Do not take into account the assets to be injected into our forecast XJ Electric 09,10 annual operating income of 2.68 billion yuan,glue stick respectively, and 2.94 billion yuan net profit of 179 million and 202 million earnings per share were 0.47 yuan and 0.53 yuan. We expect the assets to be injected to achieve equity in net profit of 09,10 186 million and 197 million calculated according to the new capital of 120 million of assets into consideration after the XJ Electric 09,10 earnings per share reached 0.73 yuan, respectively, and corresponding to 0.80 per current share price earnings ratio of 33 times and 30 times. glue gun Given China's XJ Group EPRI on the possible acquisition and subsequent integration of further asset to the national grid may be in the White business, management, regulatory and other changes to bring about large XJ Electric we give the "recommended" investment rating.
Existing business existing business including distribution automation and protection, transformers, electric railway, DC transmission protection, power system equipment and other products. Electrified railway business to benefit from the high current industry boom business is growing rapidly as other businesses grow perfectly competitive market space. We expect the performance of existing business profitability will be stable.
The Group plans to inject assets into the assets consist primarily of high-power power electronics, Fujian Tianyu, a minority stake in XJ software and other assets which are the core assets of high-power power electronics products include HVDC converter valve, wind power network control system, DC loaded gun ice melting, SVC and other DC converter valve assets and the company's current protection devices currently available can support each other follow-up is expected to remain more than 30% market share. In addition the DC injection equipment assets and related assets of China EPRI exist in the same competition that further integration of the follow-up provided to the imagination. The injection of assets is expected to 09,10 respectively, to achieve annual net profit of 186 million equity and 1.97 billion yuan.
State Grid's acquisition of the China State Grid Corporation of EPRI is currently negotiating the acquisition of XJ Group, we expect the acquisition of success is high probability event. State Grid can bring to the company after the acquisition business, management, and regulatory changes in addition a large EPRI China, the underlying assets may be further integrated into the listed companies to play an EPRI R & D and industrialization of XJ Electric Power to build synergies equipment, particularly the field of secondary equipment, the advantages of enterprises.
Prompted a national network acquisition risk uncertainty; 2 XJ Electric Group financial data disclosure issues arise in the market for its existing operations in various normative questions; 3 XJ Electric anomalies some of their high financial costs.