1.21 billion convertible bonds issued: 86.69 yuan/share
This time, the 1.21 billion convertible bonds were mainly used for gearbox bearing and precision parts projects to supplement working capital. The initial conversion price was 86.69 yuan/share. Priority placement was given to the company's original shareholders, with an allocation ratio of 64.92%. The credit rating is AA.
The proposed construction of a 57,500 gearbox bearing project is expected to achieve an important breakthrough in domestic substitution 1) Project: 55,500 gearbox bearing and precision parts projects are proposed, with a total project investment of 1,113 million yuan, including bearings, gears, output shafts and other components.
2) Production pace: The project is expected to be put into operation 30% in 2024, 70% in 2025, and production in 2026.
3) Production capacity: The project is expected to produce 55,500 gearbox precision parts products (sets) per year after delivery, including 45,000 precision parts (sets) for 3-6MW wind power gearboxes and 12,500 precision parts (sets) for 6-10MW wind power gearboxes.
It is expected to achieve annual revenue of 1,535 billion yuan, gross margin level of about 35%, and net interest rate level of about 18%, which is significantly higher than the current profit level of the company (2022H1 gross margin is about 31%, net profit margin is about 20%), further increasing the company's profit level.
The company has reserved technical research and development capabilities for the whole process of mass production of gearbox bearings, which is expected to achieve mass production of wind power bearings as core components of wind power. They have high technical barriers and high added value. Among them, gearbox bearings have the highest technical barriers. According to the statistics of “China's Wind Power Industry Leading the World, What to Do About the Bearing Industry” published by He Jiaqun, chief engineer of the China Bearing Industry Association, in the second issue of the magazine “Bearing Industry” in 2022, the localization rate of wind power gearbox bearings in China is 0.6%, which is basically dependent on imports.
The company has made technical research and development preparations on the direction of the gearbox bearing and precision parts business, including completing the design and analysis of precision bearings and parts products, and has mastered heat treatment technology, processing technology, inspection and measurement technology for precision bearings, gears, and drive shafts. The company has established a complete production and quality management system. It has technical capabilities such as raw material quality control, forging in the manufacturing process, heat treatment technology, ultrasonic flaw detection, precision measurement, and strict bench testing for the gearbox bearing and precision parts business. The company is expected to achieve mass production of gearbox bearings and precision components.
Profit forecasting and valuation
Net profit for 2022-2024 is expected to be $7.2, 10.1, and 1.26 billion yuan respectively, up 41%, 40% and 24% year-on-year. Compatible with PE 43, 31, 25X. Give the company a “buy” rating.
Risk warning
1) Raw material price risk; 2) Risk of worsening competition pattern; 3) Wind power installation falls short of expectations.