Langjin Technology announced that the company plans to issue no more than 17,311,021 shares to Qingdao Langjin Group, the controlling shareholder, and raise no more than 30,000 yuan (including capital). Qingdao Langjin Group plans to use cash to subscribe for the shares issued by the company this time.
Key points of investment
Deeply involved in the rail transit air conditioning sector, 2022 performance is under pressure for the time being
Langjin Technology has been deeply involved in rail transit vehicle air conditioning and control systems for more than 20 years, and is one of the leading rail transit vehicle air conditioning development, operation and maintenance service providers in China. At the same time, on the basis of stabilizing the strength of the original rail transit air conditioning business, the company gradually expanded into the fields of new energy and digital energy, achieving the layout of energy-saving air conditioning equipment in various fields such as high-speed rail, trains, light rail, subways, new energy vehicles, energy storage and data center temperature control, heat pump drying, etc.
In 2022, the company achieved operating income of 771 million yuan, an increase of 14% over the previous year, and realized net profit of -58 million yuan from profit to loss over the previous year. 2023Q1 achieved operating income of 113 million yuan, a year-on-year decrease of 8.68%, and realized net profit of -119 million yuan from profit to loss over the previous year. The temporary pressure on the company's performance was mainly due to commodity price increases, combined with partial credit impairment and equity payment expenses, which led to a sharp increase in operating expenses and product costs.
Overseas rail transit business continues to expand, and energy storage temperature control and heat pump drying open up room for growth
The company continues to promote the application of variable frequency heat pump vehicle air conditioning technology in the international rail vehicle market. The company has become a qualified supplier for Alstom, Bombardier and Spanish CAF internationally renowned rail transit vehicle companies. It continues to receive recognition from overseas customers in terms of products, technology and services, and its market share continues to increase. The company's on-hand orders include Spanish CAF's Swedish intercity vehicle inverter air conditioning project, Israel's Tel Aviv streetcar platform air conditioning project, etc. It is expected that the company's overseas business will continue to soar this year.
In the air energy heat pump drying industry, the company set up a professional team to promote overall technical solutions to customers. In 2022, the company received more than 100 million yuan in sales revenue in the fields of tobacco drying, agricultural product drying, and vanishing mold drying. At the same time, the company achieved market breakthroughs in agricultural and sideline product drying and industrial product heat pump drying. In particular, in the field of tobacco drying, considering that the Henan provincial government and Henan China Tobacco Company introduced relevant policies in 2020, making it clear that the province's 27903 coal-fired roasters with contiguous tobacco leaves were converted to electricity and 5,000 new electric grills were built, we anticipate that heat pump drying technology will continue to be widely promoted and applied in the tobacco drying field.
In the field of power and energy storage temperature control, the company successfully completed a number of temperature control products for 100MW energy storage power plants in 2022. It has cooperated with well-known energy storage system customers such as Xu Ji Electric, Guoxuan Hi-Tech, Blue Sky Sun, Wotai Energy, China Power Investment Tianqi, Shandong Electric, etc., and the annual supplier evaluation ranked first. It is expected that the company's energy storage business will continue to develop rapidly, opening up room for the company's future growth.
The controlling shareholder's proposed increase in holdings shows confidence in long-term development
The capital raised this time is mainly used to supplement the working capital required by the company, which is conducive to further enriching the company's business structure and products, deepening the layout of the rail transit air conditioning industry, and effectively supporting the steady rise of new profit growth points such as air conditioning for new energy buses and energy-saving temperature control products. As of the date the fixed increase plan was issued, Langjin Group held 20.76% of the company's shares and was the controlling shareholder of the company. If issued according to the upper limit of the number of shares issued this time, Langjin Group's shares will increase to 33.35%, showing confidence in the company's long-term development.
Profit forecasting
It is predicted that the company's revenue for 2023-2025 will be 1,13, 15.4, and 2.02 billion yuan respectively, and the EPS will be 0.82, 1.17, and 1.77 yuan respectively (not considering the impact of this increase in equity). The current stock price corresponding to PE is 31, 22, and 14 times, respectively. This is covered for the first time, giving a “buy” investment rating.
Risk warning
The progress of the rail transit business fell short of expectations; overseas business expansion fell short of expectations; the progress of the energy storage business fell short of expectations; there was a risk that raw material prices would rise sharply; additional development fell short of expectations, etc.