Shandong Zhanggu is a leading enterprise in the domestic blower industry, founded in 1968, with more than 40 years of Roots blower design and manufacturing experience, fans and accessories revenue accounted for nearly 70% of the total revenue. Roots blower sales revenue has been the first in the industry. In recent years, under the influence of the weak manufacturing industry and economic transformation, the demand for fans in traditional industries and environmental protection and other emerging industries has declined one after another, the company has gradually expanded to environmental protection and other emerging industries, and the sales of products in the environmental protection industry have increased rapidly. In addition, the company will further expand into the field of high-end precision manufacturing, has made substantial progress in nuclear power and military industry, and the growth space is worth looking forward to.
Domestic blower industry leader, market share of more than 40%.
Since 2000, the sales income of Shandong Zhang Drum Roots blower has been the first in the industry in China. The company and its joint venture subsidiary Shandong Zhanghuang (40% of Shandong Zhanggu and 60% of Japan's Dahuang Machinery) account for more than 40% of the Roots blower market.
Last year, the company made a net profit of 42.978 million yuan for fans and accessories, of which accessories and after-sales were only more than 2 million yuan. with the after-sale and accessories market gradually increasing, the follow-up company will step up efforts to develop this business, and the revenue growth rate is expected to remain at 15% and 20% in the future.
While constantly improving the technology and technology of Roots blower, Shandong Zhanggu has also made use of its R & D advantages and influence in the blower industry for many years, either independently or in cooperation with large international enterprises. a series of centrifugal blowers have been developed for sewage treatment plants and traditional industries in different environments. It is expected that the company's revenue from centrifugal blowers will increase significantly this year, reaching about 100 million yuan.
The "Water Ten articles" promotes the rapid growth of sales in the field of environmental protection.
There is still a gap of more than 10 billion tons of sewage treatment in our country. In recent years, the state continues to increase investment in the environmental protection industry, the blower as an indispensable machine for air and water treatment, the market space continues to increase. With its strong blower market influence and brand reputation accumulated over the years, the company will maintain a growth rate of nearly 50% in the field of environmental protection to make up for the downturn in demand in the traditional industry downstream of the blower.
In order to seize the market share of wind turbines in the field of environmental protection, the company will change its original strategy of relying solely on sales staff to cooperate with major design institutes and engineering companies to enhance its product advantages at the same time, make use of the customer base of design institutes and engineering companies to quickly increase the market share of environmental protection fans. The company also plans to participate in the local government PPP project in order to get more orders for environmentally friendly fans.
When the field of high-end precision manufacturing is expanding.
Shandong Zhanggu plans to acquire Shandong Liancheng in early 2015, hoping to enter the precision manufacturing industry through mergers and acquisitions, upgrade Zhanggu's product grade by using Liancheng's high-end technology and technology production lines, and expand overseas sales of blowers through its mature overseas business network. But in the end, it ended because the two sides failed to reach an agreement. It is expected that the company will continue to expand into precision manufacturing through mergers and acquisitions in the future.
In 2014, the company provided six high-specification stainless steel blowers for the desalting system of a Russian nuclear power plant. This order puts forward quite high requirements for the product process, which is in line with the company's expectations of expanding into the field of precision manufacturing.
The company has recently obtained the certification of weapons and equipment quality management system, which shows that the design, development, production and service management system of ZG series Roots blower has the capability of military R & D and production in related fields, which will help the company to expand the related market in the military field.
Transformation boosts earnings and valuation expectations.
At present, the share price of Shandong Zhanggu corresponds to 73.9x14PE and 7.56xPB, which is lower than the average valuation of 123x14PE and 7.4xPB in the machinery industry. We expect the revenue growth of the blower in the environmental protection industry to grow by 50% and 40% respectively from 2015 to 2016, and to maintain steady growth in traditional industries, with the company's net profit growing by 17% and 14% respectively. The company's asset-liability ratio is only 23%, taking into account the company's sound operation and transformation expectations, the current valuation is more attractive.