Key points of investment
Deeply involved in bridge steel structures, and performance is growing steadily. Haibo Heavy Technology is a high-tech enterprise dedicated to the design, manufacture and installation of bridge steel structures. In its development history of nearly 30 years, the company has participated in the construction of hundreds of steel bridges, with project performance in more than 20 provinces and cities. The company has qualifications such as steel structure engineering professional contracting level 1 and China Steel Structure Association special grade. Since listing in 2016, operating income has been growing steadily, with a compound annual growth rate of over 16%.
Steady growth is an important starting point for the current countercyclical adjustment of the economy. Policies, project reserves, and capital have ushered in continuous improvements, driving a phased acceleration in infrastructure construction. The first half of 2022 grew 9.3% year on year, and the growth rate reached 12% in June. The progress of infrastructure construction accelerated markedly.
Driven by the dual carbon policy, the penetration rate of steel structures continues to increase in the medium to long term. Prefabricated buildings have reduced carbon emissions during both the production of building materials and the construction phase. The 14th Five-Year Plan period ushered in rapid development, and the penetration rate of prefabricated buildings is expected to reach 40% by 2030. Steel structures are one of the main ways to achieve prefabricated construction. Currently, steel structures in China account for only 8.4% of construction steel structures, far lower than 30% of developed countries. With further policy catalysis, the penetration rate of steel structures is expected to continue to increase.
The space for bridge steel structures is still vast, and “capacity expansion+digital transformation” enhances competitiveness. Bridge construction is an important part of transportation construction such as highways, railways, and urban overpasses. China's transportation infrastructure is still at a low level compared to developed countries. It is expected that highways, railways, and urban expressways will continue to maintain high-intensity investment in the future, and there is strong certainty that the company's main business, bridge steel structures, will continue to develop. At the same time, on the one hand, the company plans to find vacant plants in coastal areas and form a mixed production base that can produce various steel structure products through resource integration to expand production capacity. On the other hand, it has signed a strategic cooperation agreement with Inspur Tongsoft to promote the company's upgrading and digital transformation to intelligent manufacturing and enhance the company's competitiveness.
Profit forecast and valuation: We expect the company's net profit to the mother for 2022-2024 to be 130 million yuan, 165 million yuan and 204 million yuan respectively. Corresponding to the closing price of PE on July 25 will be 18.6 times, 14.8 times, and 11.9 times, respectively. The first coverage gave the company a “prudent increase in holdings” rating.
Risk warning: macroeconomic policy risk, receivable recovery risk, steel price fluctuation risk, risk of steel structure penetration rate falling short of expected risk, new business development falling short of expected risk