Summary: the downstream mainframe industry is developing rapidly, and the key parts industry is ushering in the spring.
The mainframe industry, such as construction machinery, shipbuilding, wind power and so on, has developed rapidly in recent years, while the conduction effect of key components as a post-cycle industry lags behind the mainframe by about 3-6 months. We think that with their increasing importance and demand, it's the best time to invest in them.
Point one: the rapid development of ships and marine engineering
Since last year, orders in the shipbuilding industry have obviously recovered strongly, and the country has recently made great efforts to promote the development of inland river shipping. The great development of the central and western regions will certainly bring about the prosperity of inland river shipping. As one of the main supporting enterprises in China, the company is expected to grow. The company is also a designated supplier of gearboxes for military ships, and with the great development of the navy, if several major fleets are to be built in the future, the military orders of Hangzhou teeth will also greatly exceed expectations.
Point 2: the golden period of construction machinery drives the rapid growth of Hangzhou teeth.
Hangzhou gear is the largest independent supplier of construction machinery gearbox in China, with a market share of more than 20%. The company's electro-hydraulic control transmission is the current mainstream product. This year, we think that the growth rate of the construction machinery industry is about 30-40%. With the production of the fund-raising project, we think that the growth rate of Hangyan this year will be no less than 40%.
Point 3: wind power gearbox will be an important growth pole in the future.
Hangzhou teeth is one of the earliest domestic enterprises to design and manufacture wind power gearbox, but after a few years of confusion, there is a big gap between high teeth and heavy teeth. The company has advantages in 2MW wind power gearbox technology, and the current 3MW technology also needs a breakthrough. Wind power will be the key business of the company in the future. We believe that under the control of nuclear power, the wind power industry will have steady growth, and the company will quickly break out in the wind power industry by virtue of its leading position.
Point 4: the net profit margin is obviously low and the upward momentum is obvious.
We compared the net profit margin of Hangzhou teeth over the years, which was only 5.8% last year, which is significantly lower than that of the same industry, such as Dongli Transmission and far East Transmission, which is 12% and 18%. The net profit margin of Hangzhou teeth is even less than half of that of their peers, but it is increasing year by year. We believe that the low net profit margin in the past is due to the efficiency and management of the old state-owned enterprises. At present, the management owns shares. We believe that the pace of optimizing the process, reducing wear and tear, and increasing the net profit margin will be accelerated.
Target price 25 yuan, give a "buy" rating
We expect 2011-2012 EPS 0.50,0.70 yuan, see the next page of profit forecast and analysis.
