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Zhejiang Kingland Pipeline and Technologies:Main Business Recovering,Smart Pipeline System Fuels Future Rise

发布时间:2016-07-06    研究机构:兴业证券

Company Profilel

Zhejiang Kingland & Pipeline Technologies Co.,Ltd was founded in 1993,is located in Huzhou Cityarea in the north of Zhejiang Province and on the south bank of Taihu Lake.As a large hightechnical public listed company with stock name:Kingland Pipeline and code:002443,ZhejiangKingland Pipeline & Technologies Co.,Ltd mainly engages in manufacture of high grade oil & gaspipeline and new green civilian pipeline.So far,it has 4holding and share pipe companies,whichis also regarded as one of the largest comprehensive pipe manufacturing bases.

Investment Highlights

Leading pipe manufacturer in China, main products are “galvanized steel pipe, steel‐plasticcomposite pipe, helical weld pipe”.

Gross profit margin of steel‐plastic composite pipe and hi‐frequency straight welded pipe(HFW219) reached 28.16% and 13.86% respectively despite of doom in steel and oil & gasindustries. With 100,000metric ton new steel‐plastic composite pipe facilities constructed andimplementation of high‐grade helical weld pipe and stee‐plastic composite pipe project for oil &gas transportation, we expect product mix of the Company to be further optimized andproportion of more profitable pipes may increase in total sales.

Anti‐graft campaign in oil & gas industry came to an end. Government is promoting reform andhas invested large amount of money building oil & gas transportation network in and abroad,which will boost demand for Kingland’s products as well as benefit export business.

Zhejiang Kingland Pipeline and Technologies signed strategic cooperation frame agreement withLingtu Software in July 2015and bought 46% stakes in the company last month, stepping forwardin intelligent pipeline system business.

Earnings Forecast and Investment Recommendations: We made EPS forecast for the Company atCNY 0.29in 2016, CNY 0.40in 2017and CNY 0.56in 2018, implying 49x/35x/25x PE. ReiterateOUTPERFORM.

Potential Risks: slower‐than‐expected progress of smart pipeline system business, main businessremain weak.

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