The hottest leader in TBEA transformer industry

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TBEA transformer industry leader

TBEA (600089) is the first listed transformer enterprise in China, formerly known as Xinjiang Changji special transformer factory. At present, the controlling shareholder is Xinjiang Tianshan Electric Co., Ltd., with a total share capital of 854million and a circulating share capital of 576million; Through years of operation and capital operation with clear ideas in transformer, wire and cable industries, TBEA has formed the development strategy of three industrial chain clusters of "power transformation, new materials and new energy", and built the industrial manufacturing layout of "Northwest southwest South China North China East China northeast"

roadmap for the combination of industry and capital

since 1997, TBEA has expanded its industrial layout through a series of capital operations. In just a decade, it has formed three main business patterns: transformer products with Shenyang substation, hengbian substation and xinbian as R & D and manufacturing bases, photovoltaic products of new energy shares, and aluminum products of Xinjiang Zhonghe (600888), a joint-stock company. In 2000, it merged Hunan Hengyang transformer factory by way of debt; In 2001, 166million yuan was invested in the first phase of the technical transformation project of Hengyang transformer factory to build the largest fully enclosed, air-conditioned, constant temperature and humidity, dust-free and clean modern workshop in Asia; In 2003, it bought the core assets of Shenbian with 387million yuan, beating Siemens and Chint Group; Xinjiang International Trust received 17.05% equity in 2004, 12.5% equity in 2006, and held 81.82% in 2007. It achieved absolute control over Shenbian by means of bridge financing; In 2007, the parent company held 63.45% of hengbian, with a production capacity of 40million kVA. Capital investment and technological transformation project construction made hengbian one of the parent company's R & D centers; In 2008, the company plans to acquire another 141million shares of hengbian transformer and invest 347million yuan to build a special technical transformation project called cylinder hydrostatic testing machine and UHV shunt reactor for testing gas cylinders. Compared with 1997, the production capacity expanded by 100 times, the main business income increased by nearly 24 times, and the net profit increased by nearly 12 times

the main business maintained rapid growth

in 2007, transformers were still the main contributor to the company's performance, of which Shen transformer and Heng transformer contributed more than 50% of the total net profit. The outstanding technical strength of Shenbian and hengbian is the core advantage to ensure the growth of performance. In 2007, they contributed 112.5428 million yuan and 112.5682 million yuan to the parent company respectively, with a year-on-year increase of 66% and 96%, and a gross profit margin of 23.16%, an increase of 2.73 percentage points over 2006. The adjustment of product structure has begun to take effect. Shen transformer and Heng transformer mainly manufacture 500kV and above transformers and reactors. However, the current capacity of about 80million KVA is still tight, which restricts the performance growth in 2008. It is expected that in the coming years, technological transformation and expansion will expand the transformer capacity to 1 800million KVA, and the production capacity will be fully released in. The interim performance of the company is expected to increase this year, and the net profit increased by% over the same period, mainly due to the good operation of the power transmission and transformation business in the first half of the year, and the revenue and profit in the second quarter exceeded the expectation. The annual production schedule is full, and the performance growth has been finalized: in 2008, the company increased orders by more than 2billion yuan, and has basically achieved the established goal of "an enterprise with an output value of 10 billion"

core advantages of R & D and manufacturing capacity

since 2003, the company's business structure has developed in depth. In 2003 and 2006, the company won two large overseas orders, with contract amounts of US $25.126 million and US $339 million respectively, accounting for 50.3% of the total amount of major contracts at present; In 2007, the international business income was 1.296 billion, accounting for 14.5% of the company's operating income, with a year-on-year increase of 130.66%; Figure 5 and Figure 6 show that the growth rate of international business income has accelerated, and the proportion in the parent company's business has an obvious trend of expansion. At present, the main project of 220kV transmission and transformation lines in Tajikistan has been completed, with an operating income of 460million yuan; The preliminary design of 500kV power transmission and transformation project has been completed, and it is expected to be completed by the end of 2011. It is understood that the company is actively negotiating other overseas engineering contracts before Shandong proposes to comprehensively carry out the conversion of new and old kinetic energy. The expansion of international business shows the company's ability to improve the structure of business areas, long-term focus on the innovation of major technology research and development, the transformation from equipment suppliers to "turnkey" service solution providers, and the company's use of technology and scale advantages to increase investment in million volt high-voltage products, so that foreign multinational companies have produced their transformer products from the original single product, which can always ensure strong international/domestic competitiveness, It ensures a high gross profit margin for overseas businesses

investment rating and risk tips

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the company's performance growth expectation in the next three years is clear, which is basically in line with our profit forecast for the company. According to the 2007 profit distribution and capital reserve transfer plan, the annual earnings per share after comprehensive dilution are 0.7, 1.02 and 1.43 yuan respectively. According to the peg valuation principle, we believe that the reasonable value range is yuan. At present, under the secondary market system risk, There has been a sharp correction in the stock price, and the long-term investment value has been seriously underestimated. We believe that at the time of the deep correction of the market, it is the time when investment opportunities appear that we should maintain the "recommended rating". Risk tip: pay attention to the drag of macroeconomic adjustment on the prosperity of the whole industry, as well as the cost pressure on the equipment manufacturing industry in the process of returning the price of oil and power resources to value. (author: Chen Peng)

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