On April 29, Luen Mei Quantum released 2019 annual report and quarterly report of the first quarter of 2020, indicating significant increase in performance indicators and a historical high of both revenue and profit. Due to “core assets” property, consecutive profit sharing and steady share rise, the Company continuously bought in more shares recently and came out the largest bulk-Quantum stock on public utilities board.   

From beginning to end of 2019, share price of Luen Mei Quantum nearly doubled (92.45%). Although the market has fluctuated and investors have felt pessimistic since the beginning of 2020, Luen Mei Quantum attained 60-day share rise of 12.36% and continuous capital inflow.

Eye-catching “core assets” performance, cash bonus valued 481 million Yuan was distributed

As China’s economy turns from rapid growth to high-quality growth, capital market reform steps into “the deep water zone” and value investment ideal gradually enjoys popular support. Among many excellent enterprises, industry leaders featured by core competitiveness, high management level and high ESG level are called “core assets” that leave competitors far behind in the capital market and gain huge capital inflow.  

    
As a leading clean heat supply company in the A share market, Luen Mei Quantum has been chosen “core assets” by virtue of steady revenue growth, strong profitability, high assets income, sufficient cash flow, few liabilities with interest and low valuation and has remarkable performance in the A share market.

As to cash bonus, the Company achieved an annual average rate of cash bonus of about 30% in the past three years. The annual average rate of cash bonus reached about 30% in the past three years and 30.19% in 2019. Based on general capital on December 31, 2019, it was planned to distribute cash bonus valued 2.10 Yuan (tax-inclusive) per 10 shares to all shareholders, adding up to about 481 million Yuan (tax-inclusive). Long-term investors gained handsome capital return.

Revenue has increased steadily for more than ten years and caught eyes in the first quarter 

According to performance data of 2019, Luen Mei Quantum achieved operation revenue of 3.396 billion Yuan with a year-on-year growth rate of 11.83%. The net profit vested in shareholders of the parent company was 1.592 billion Yuan with a year-on-year growth rate of 20.86%, ROEWA was 23.67% with a year-on-year growth rate of 6.19%, and net cash flow from business activities was 1.483 billion Yuan with a year-on-year growth rate of 26.98% and monetary capital increased by 727 million Yuan to 5.07 billion Yuan.

Luen Mei Quantum’s revenue also increased sharply in the first quarter of 2020. Report revealed that operation revenue was about 1.76 billion Yuan with a year-on-year growth rate of 25.04% and net profit vested in shareholders of listed company was 898 million Yuan with a year-on-year growth rate of about 15%.

It is well known that heating engineering features exclusiveness and natural monopoly and relates to foundation engineering beneficial to the people's livelihood, and revenue has increased steadily for more than a decade as Luen Mei Quantum continuously expanded advantages of heat supply industry. Therefore, business performance was not affected and the Company showed strong risk prevention ability despite trade friction and global economic slowdown.

In the last decade, Luen Mei Quantum’s market volume increased with increase in business scale. As a result, operation revenue increased steadily and annual average growth rate reached 30%.

Furthermore, Luen Mei Quantum is constantly expanding national business layout and consolidating business “moat” by virtue of cash in hand valued above 5 million Yuan and industry leading technical strength. Through cooperating with China Huadian Group, a central enterprise, the Company invests and runs Shanghai National Convention and Exhibition Center Energy Station and Shenyang Sujiatun cogeneration project, steadily expands market size and lays a solid foundation for revenue of 2020.

The largest bulk-Quantum stock of public utilities in the first quarter

Luen Mei Quantum, as “core assets” jointly elected by Data Box and Tonghuashun Stock, has been recognized by professional investors for its leading position and future investment value by virtue of experience in heat supply and business scale.

Since January, 2020, Luen Mei Quantum has received sustained attention from such securities firms as Shenwan Hongyuan Securities, GF Securities, Industrial Securities, Golden Sun Securities, China Securities Cooperation, Ping An Securities and New Times Securities, a total of 298 research reports have been published and “core assets” property have received more attention and popularity.

Moreover, Luen Mei Quantum’s high-quality development was recognized by securities firms, since this year:

Chosen “high-Alpha bulk-Quantum stocks” of Great Wall Securities and able to bring stable returns to investors;

Chosen “Liangma Qushi optimal combination” of CITIC Securities that could reflect latest highlights of the industry;

Chosen “high-dividend steady assets” of Southwest Securities and had sound cash flow and steady growth ability;  

Chosen “top 10 market certainties” of China Fortune Securities and ranked the 3rd;
Chosen “investment portfolios of industry recovery power” of Zhongtai Securities and continuous expandability of capacity was recognized by professionals.

Except sustained attention of securities firms, Luen Mei Quantum bought in more shares from institutions and its position ratio came out top in the industry.

According to research report of TF Securities, in the first quarter of 2020, market value of bulk-Quantum stocks on public utilities board was 3.69 billion Yuan, ratio of bulk-Quantum stocks was 0.57% and bulk-Quantum stocks have increased continuously since 2019. Where, Luen Mei Quantum borne the largest bulk-Quantum stock of public utilities 2020Q1 and held shares valued 692 million Yuan and shareholding ratio of public utilities board was 18.75%. 

In addition, among top 10 buy-in objects of public utilities Q1, Luen Mei Quantum took a position valued 692 million Yuan with chain growth of 166 million Yuan and ranked the 4th on public utilities board.

Research report of Industrial Securities also mentioned that in environmental protection board, the position ratio of 2020Q1 public placement was 0.57% with a chain growth rate of 0.1%. Where, Luen Mei Quantum’s market value of public placement was 797 million Yuan and ranked the 2nd on environmental protection board. 

According to specific position data of funds and data of East Money, Luen Mei Quantum gained concentrated position from such famous institutions as Fuguo Zhongzheng Value ETF, ICBC Steady Growth Mix A, Bosera Dominant Enterprise (LOF) A, Bosera Theme Industry Mix (LOF), Harvest Changqing Competitive Advantage Share A and ICBC Strategic Emerging Industry Mix A and its investment value was recognized by the market.

It is worth noting that Luen Mei Quantum’s forward PE is about 20, there is a huge room for improvement of valuation and more attention may be received from more institutions with sustained growth of the Company’s intrinsic value and Zhaoxun Media’s spin-off listing on GEM.

（source：Weekly On Stocks）