South China Pumps maintains rapid growth for the next three years

Recently, the South Pump announced an announcement that it intends to purchase 100% of Jiangsu Jinshan Environmental Engineering Group Co., Ltd. by issuing shares at a price of 26.26 yuan per share and issue 68.309 million shares publicly.

The water treatment industry is booming and Jinshan has high environmental growth and confidence. The implementation of the new environmental protection law and the support of national policies have jointly promoted the sustainable development of the environmental protection industry. As one of the core environmental protection industries, the water treatment industry is upgrading from processing to utilization, and the development of the industry is booming. Jinshan has excellent environmental protection qualifications. Compared with similar listed companies, its gross margin and net profit margin are far ahead. ROE levels are also significantly higher than companies with the same asset-liability ratio. At the same time, the company promised that the net profit after deduction in 2015-17 will reach 120 million, 190 million and 300 million yuan respectively, and the compound growth rate in the three years will be as high as 58%, demonstrating full confidence.

The integration of Jinshan Environmental Protection's projects, experience, and market influence in the industrial and municipal wastewater treatment areas has resulted in significant synergies. Jinshan Environmental has extensive experience in project management in industrial and municipal applications. Downstream customers are complementary to South China Pumps. Through this cooperation, the company will expand its business and serve customers through cross-industry chain coverage, strong technology, and product advantages based on the product's water intake and drainage. This will help improve the relevant market for in-depth development of sewage and sludge business and increase orders. Gain access to capabilities and market influence, and consolidate market advantages in emerging markets such as environmental protection.

In the newly disclosed “Investor Relations Record Form,” it is stated that in recent years, the South Pump has established a foothold in the manufacturing industry, and at the same time, under the ever-changing market environment, it has prudently explored and pursued the transformation and transformation of the company. The company will take the acquisition of Jinshan Environmental Protection as the starting point, gradually realize the development of the company from the manufacturing enterprise to the environmental protection enterprise, and actively realize the company's transformation.

Combination of manufacturing and engineering, 1 1>2. Jinshan Environmental Protection, as an industrial and municipal sewage treatment company, has certain complementarities with the downstream customers of the Southern Pump Industry. The South China Pump Industry Co., Ltd. can provide technical support for Jinshan Environmental Protection's pump products and at the same time rely on the latter's project experience and market influence in the field of water treatment to rapidly advance the relevant product markets. At the same time, Jinshan Environmental Protection's capital strength has improved after it entered a listed company, and its ability to expand the project can be significantly strengthened. "1 1" is expected to be greater than 2.

2015 will be a key year for the development and transformation of the company, and the performance in the next three years is expected to maintain rapid growth. In the near future, “Water 10” landed, plus the Zhejiang “five-water joint treatment” opportunity, the business was in line with domestic demand and received policy support. In addition, the four plant sites of Linping, Renhe, Changsha, and Huzhou are basically completed, and new production capacity is entering the harvest period. The expansion of collaborative extension has been steadily progressing, supporting excellent business management and flexible incentive mechanisms, and continued to actively strengthen the construction of marketing networks, laying a solid foundation for growth in the next three years.

The company said that in recent years, the company's pump manufacturing capacity has been basically completed, no need to add a large-scale capital expenditure; at the same time, South Pump's cash flow is in good condition, the debt is small, in the future the company will continue to support environmental protection with the cash flow generated by the business business.

According to the data, the South China Pump Industry Co., Ltd. water supply equipment includes constant pressure frequency conversion water supply equipment, pipe network pressure (no negative pressure) frequency conversion water supply equipment, intelligent frequency conversion water supply equipment and other 12 categories. Applicable to a wide range of uses such as water supply for residents, water for public places, and water supply for manufacturing industries.

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