NARI: 70 times price-earnings ratio of high growth Qiang Cheng
Investors Report (Reporter Lai Zhihui) before two good news to NARI (600 406
quotes, love shares) (600406.SH) concern. First, the controlling shareholder of
Nanjing Nari Group May 13 holdings of shares by the SSE system, 289.224 million,
for the next 12 months continue to holdings of shares in the SSE system, and
commitment to implementation of the scheme holdings Reduction of the statutory
period and not during; Second, the state power grid came news of July this year, will
launch Smart Grid.
Currently, NARI&#39;s A share price-earnings ratio is close to 70 times, there is
obviously overestimated, but the holdings of the controlling shareholder of shares of
the Company at this time somewhat unexpected, smart grid connection in July
introduced good policies, all have substantially decreased and is rational.
Information, NARI is the leading electricity enterprise automation, substation
automation products in more than 40% market share, once the smart grid and the
company is undoubtedly the first to benefit.
&quot;Smart Grid will become the new company&#39;s future profit
growth.&quot; Deputy general manager Song Yunxiang clear on the
&quot;Investor reported,&quot; said NARI one of the existing emerging
business of digital substation, is itself part of intelligent network services.
Smart Grid benefits
NARI professional power and industrial control automation software and hardware
development, actually controlled by the State Grid Corporation, and is the only listed
company of its subsidiary.
As a secondary device industry leaders also backed by the national grid resources,
with the State Grid and China Southern Power Grid on the next two to three years,
substantially increased investment program, the company will directly benefit from
The expected favorable stimulation, NARI Group holdings of the controlling
shareholder of 289.224 million shares, the total share capital of 1.134%, holdings of
the price of 29 yuan / share, overweight Hou Nanrui 9255.168 million shares held by
the Group, company&#39;s total share capital of 36.286%. At the same time,
NARI Group also plans to continue the next 12 months, overweight, and commitment
to implementation of the scheme in the holdings of non-reduction during the period
In this regard, &quot;Investor Report&quot; on the holdings of reason and
intelligent network news contact NARI Group Publicity Department, the relevant
person politely refused to be interviewed. But the &quot;Investor
Report&quot; learned from the national grid, national grid in the UHV held in
late May meeting, at which the clear smart grid development, specific plans may be
introduced in July.
Informed sources said that State Grid Company will have to clear China&#39;s
development direction of smart grid of UHV power grid is based on the information
digitization, automation, Hu Dong grid into an intelligent feature. &quot;Smart
grid development will greatly increase to network scheduling system and digital
substation secondary equipment on behalf of the needs.&quot;
It also signals that the company&#39;s two main business will usher in growth.
On the one hand, the future of the smart grid will make more intelligent scheduling,
update requirements, intelligent scheduling in grid construction will greatly improve
the position, but is the State Power Grid Dispatching Automation NARI important
core business. Last year the company the product more than 30% the proportion of
total revenue, gross margin reached 34.77%, one of the company&#39;s main
source of profits.
Bohai Securities analyst Li new channel Ren Wei, power grid dispatching automation
has always been yes Gong Si&#39;s flagship product, competitive ability, the
national grid as the company&#39;s actual controller to support our business and
is rational, even if jurisdiction Fan Wei Zai within Southern Power Grid, Inc.
competitive advantage is clear.
Lee said the new channel, &quot;China Southern Power Grid and the total
transfer of five provinces under the jurisdiction of the Southern network transfer, and
five provinces in Southern network scheduling and the capital city of Hainan Province,
to transfer all three, are used NARI dispatching automation system.&quot;
Currently, the company dispatching automation products transferred in the network
Province about 75% of high-end market share, in the end to adjust the 30% market
On the other hand, an important element of smart grid is to increase the substation
automation and establish a digital substation. In the field of substation automation
product, NARI has a strong technical advantage and market competitiveness, market
share of over 40%. Last year, the company&#39;s revenue for the substation
automation 360 million yuan, accounting for 32.8% of revenue.
According to the national grid development plan, each of the next five years on the
substation automation products and systems around the needs of 8.0 billion in the
future use of the technology of the substation automation system share proportion is
increased. Li new channel that, according to the initial 10% of the total demand of
products using this technology to estimate, two years after the size of the market in
this area up to 800 million yuan, and gradually reach 4 billion yuan.
Changes in the overall listing of related party transactions to help
In addition to the company&#39;s main business and increased profits brought
about opportunities to bring additional benefit of smart grid is conducive to improving
the company&#39;s controlling shareholder with a long history of association
between NARI Group transaction. Related party transactions are NARI developing a
major worry, in 2008 earnings call, there are many investors questioned.
Last year, the company is due to additional financing transactions associated with
abortion. In fact, the company and its major shareholders very close contact NARI
Group Corporation, in the past most of the company&#39;s raw materials and
products processed by the NARI Group, commissioned in 2007 alone, the company
purchased goods to the NARI Group near 200 million yuan, to the NARI Group Sales
products 51.05 million yuan.
To carry out smart grid business will change that. According to deputy general
manager Song Yunxiang introduced after the implementation of smart grid, the
company will own all the products manufacture and processing of the past, raw
materials and products processed by the NARI Group, commissioned by the model
will therefore change. Earlier this year, the company has launched a preliminary
market research, preparation for independent production.
Song Yunxiang said the company will also consider refinancing this year, but the
investment group will try to avoid the associated transactions with NARI projects.
However, CIC Securities analyst Lin Xiong believes that if the company will no
longer have capital market financing, or carrying out the necessary integration of
assets, or is the complete listing of the Group as a whole.
It is noteworthy that related party transactions are resolved, NARI Group, the pace of
the overall market with the smart grid will accelerate the development. March 3 this
year, held NARI Board of Directors on the Board of Directors election, the National
Network Electric Power Research Institute Xiao Shijie was elected president of NARI
as chairman, was widely interpreted as a national network to speed up the pace of
asset integration symbol .
While the holdings of major shareholders, compounded this tendency. In addition,
NARI Group, the same as in the protective relay NARI NARI, following Paul and
many products in the field of competition with the end of last year NARI National
Grid has started following the insurance to sort out some of employee shares.
People in the national grid within the &quot;Investor reported,&quot; said
NARI Group, the fastest overall market will be achieved this year or early next year.
Possible two-step, following the first addition to NARI into assets other than
insurance, and then, following Paul Note Runan Rui, NR ensure equity relationships
more complex, from the profitability point of view, Nari, following Paul&#39;s
profitability is NARI twice.
Is a high growth performance will
Since the state has increased this year, construction of infrastructure, many cities
began to build rail transit. Information to the planning of route length of 2015 is 2,400
kilometers, nearly 700 billion yuan investment.
The State Power NARI yes the very few in control of both Chengshiguidao
Transportation Electric Power Automation Monitoring, environmental and equipment
monitoring Hexinjishu and Syndicated news monitoring system Deng engineering
design, Shishi technology of Danwei, Muqian company Dingdanzengchang obvious,
Zai hand Hetongdadao 1.9 billion. Operating income in this area in future will be up
In the rural power grid, the grid this year, the government is one of the key investment
in rural power grid construction and upgrading, continuing to target resilience
improve the power grid, while its current phase of development of products has been
focused on Shangshu transmission and distribution network market. Rural power
market is large and broad prospects, and company growth has been relatively stable in
Capital Securities report said, Zai Zhengfukuoda domestic demand, increase the
intensity of policy guidance grid Tou Zi Xia, Gong Si Zuoweiguonei secondary
transmission equipment of the leading companies, Wei Lai Jiang Fenbie two years net
profit grew by 28.5% and 21%.