In order to ensure sound and rapid economic growth, the state has announced a series of stimulus policies, including a substantial increase in railway investment on the basis of the railway's Eleventh five-year Plan, which will exceed 3.5 trillion yuan in the next three years and is expected to exceed 5 trillion yuan by 2020. Driven by large railway investment, the related industrial chain will enter an unprecedented golden period of development.
The company's railway machine tools and gearbox products will benefit from the state's large-scale investment. With the adoption of directional additional issuance in the future, various technical reform measures will improve the competitiveness of the company's products and enable the company to maintain certain growth in the future. We expect the compound growth rate of net profit attributed to the parent company to be 9.91% in the next three years. The company's railway machine tools are mainly used for the processing and maintenance of railway axles and wheels, and are exclusive domestic products replacing imports. All the technical indicators have reached the international advanced level, and the domestic market share is as high as 80%. The increase in railway investment that began in 2006 has been transmitted to the railway machine tool industry since 2008, and this big investment pull will be transmitted to the railway machine tool industry in 2011. The company's gearbox products are mainly used in construction machinery, military industry and coal machinery, using hydraulic shift, which has obvious advantages compared with similar products, and has been designated as the only designated supporting manufacturer of the military. The state's accelerated infrastructure investment will pull construction machinery products, and gearbox products are expected to be pulled indirectly. Through directional additional issuance, the company plans to carry out large and heavy CNC horizontal machine tool industrialization technical transformation project, high-grade and precision CNC machine tool manufacturing upgrading project, military high-precision gear and hydraulic shift gearbox production line technical transformation project and small food machinery technical transformation project. through this technical transformation, the company's product structure is gradually focused on numerical control and high-end. It is estimated that the income will increase by 250 million yuan, 98.83 million yuan, 69.6 million yuan and 60 million yuan respectively after reaching production.
At that time, the company's sales scale and profitability are expected to be effectively improved.
Large fluctuations in the prices of raw materials such as steel will ease the cost pressure on the company and reverse the downward trend of gross profit margin in 2008, which will be reflected in the performance in 2009.
We believe that the impact of international and domestic macroeconomic fluctuations on the company's product demand can not be ignored. at the same time, the sharp fluctuations in the price of steel and other raw materials also bring great uncertainty to the company's future operation.
In view of the potential of the company to be driven by large railway investment in the future, we give the company twice the valuation level of PB, corresponding to the estimated share price of net assets of 5.37 yuan and 5.61 yuan per share in 2008 and 2009, respectively, and the absolute valuation value is 5.29 yuan.
