Longhua Energy Savings: New material business layout benefits are effective

Securities Times Network September 21st Event: From January to June 2017, the company achieved operating income of 461 million yuan, an increase of 8.11% year-on-year; net profit of mothers was 24.65 million yuan, an increase of 33.80%. Investment points The new material environmental protection business is driven by two-wheel drive, which boosts the company's performance. The company focused on the development of new materials sector, with rapid growth in performance, net profit increased by 35.61% year-on-year, and vigorously laid out the field of military and civilian integration of new materials; environmental water treatment sector project is progressing well, traditional heat transfer and energy conservation business continues to be stable, resulting in the company's deduction The net profit of returning to the mother was 19,013,500 yuan, a year-on-year increase of 110.09%, showing the company's good development momentum. Focus on the main business of the new materials sector, and further consolidate the dominant position in the domestic high-end display panel industry. During the reporting period, the new materials segment achieved operating income of RMB 67,763,400, a year-on-year increase of 77.92%, and a net profit of RMB 1,000,540, a year-on-year increase of 35.61%. The company's layout of new materials has achieved good results. The shipments of Mn targets from Sifeng Electronics' main subsidiary, Sifeng Electronics and Guangxi Jinglian Optoelectronics, continued to increase, driving the target business to grow at a faster rate. The shipments of Sifeng Electronic Molybdenum Targets increased significantly, up more than 60% over the same period of last year; the wide-format molybdenum targets achieved mass production and sales, and the product performance and quality can be stable to meet or exceed the similar products imported from abroad. Guangxi Jinglian Optoelectronics has comprehensively improved the quality of ITO targets, improved production efficiency, and rapidly expanded its production capacity from 60 tons/year at the beginning of the year to 60 tons/year. Various new materials have entered the testing stage, and sales in the future are expected to advance steadily. . The overall operation of the key projects of the environmental protection water treatment business is in good condition. During the reporting period, affected by overcapacity, the environmental protection water treatment sector achieved an operating income of 180 million yuan, a year-on-year decrease of 2.03%, and a net profit of RMB 20,397,700, a year-on-year increase of 5.3%. The key project Hebei County has completed 42% of the civil construction progress in the first half of the year. The civil engineering main body of the Xinjiang Changji Water Supply Project has been basically completed, and · entered the equipment installation stage. Increase the layout of new materials for military and civilian integration. With the acceleration of the national military-civilian integration strategy in recent years, the military industry has been upgraded. In the face of great development opportunities, the company gradually laid out the military industry. In February 2017, the company completed a controlling acquisition of Hunan Zhaoheng Material Technology Co., Ltd., and obtained a 52.99% stake in Zhaoheng Technology. Zhaoheng Technology became a holding company of the company. During the reporting period, the company signed an equity transfer agreement with the shareholders of Xianning Haiwei Composite Materials Co., Ltd. to acquire 66.69% of its equity. Xianning Haiwei is a leading domestic marine composite material manufacturer. At present, the company has obtained the approval of the National Defense Science and Technology Industry Bureau for the acquisition of Xianning Haiwei. In the future, the company will also focus on military materials in the military industry and deploy a series of new businesses. Risk Warning: New material sales and environmental projects have progressed less than expected, and traditional businesses have declined.