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Event description Changbao Shares It is announced today that the company plans to change the fund-raising project SUPER304H high-pressure boiler tube project into a high-end oil well tube processing line project.
The event comment changed the raised investment project, but did not change the company's high-end strategic line: the original raised investment project product SUPER304H high-pressure boiler tube was an imported substitute product, but the dumping of foreign manufacturers in the early stage reduced the product price from the original 150000 yuan/ton to about 60000 yuan/ton. The sharp drop in price will make it more difficult to promote import substitution at a low price. The rapid decline in profitability of SUPER304H high-pressure boiler tube products has also become the main reason why the company decided to change the project. Downstream demand decline and supply performance barriers are the biggest difficulties encountered in the import substitution process of high-end boiler tubes. However, we expect that the company will still choose to promote the construction of the S304H project. After all, the company has invested a lot of manpower, material resources and financial resources in the ultra supercritical S304H localization project. In addition, since the localization of ultra supercritical units has been included in the "12th Five Year Plan", it is not ruled out that the structural upgrading of thermal power units and the introduction of mandatory localization policies will drive the S304H back to high prosperity in the future.
With the extension of oil exploitation to deep and ultra deep wells, the geological environment is getting worse and worse, and the market demand for high-strength anti collapse and corrosion resistant non API oil well pipe is growing, and its profitability is also relatively strong. Therefore, the company's choice of investment in non API oil well pipe projects conforms to the company's high-end strategic route, and is also conducive to further improving the market competitiveness and profitability of the company's oil well pipe products.
From the perspective of the project itself, the total planned investment of the project is 160 million yuan, including 133 million yuan of the remaining raised investment fund and 21 million yuan of the over raised fund of the original raised investment project. The construction period is 12 months. The company is expected to achieve an annual revenue of 818 million yuan, an annual total profit of 28 million yuan, and a profit margin of 3.38%, lower than the company's 6.96% level in the middle of 2012. Considering the approval time of new projects, we assume that the project will be started at the end of this year and completed at the end of 2013. It is expected that the new project will thicken the company's EPS by 4.17% in 2014, a small amount.
In the short term, the company relies on three traditional main businesses, namely, oil well pipe, casing pipe and high-pressure boiler pipe, while in the medium and long term, it relies on variety structure adjustment: the company's existing product structure includes oil well pipe, casing pipe and high-pressure boiler pipe. Under the condition of ensuring the stable production increase of the traditional main business, the company actively promotes the adjustment of product structure, and constructs projects such as CPE and ultra long U-tube, which will become the main driving force for the release of the company's future performance.
The construction of newly raised investment projects still needs time, and has limited impact on the company's performance in the short term. Regardless of its impact, the company's EPS in 2012 and 2013 is expected to be 0.56 yuan and 0.90 yuan respectively, maintaining the rating of "prudent recommendation".
