The average annual demand for turbochargers will grow by about 20% in the future.
Turbocharger of internal combustion engine is a key component matched with internal combustion engine, which has the characteristics of energy saving and environmental protection, and is widely used in automobiles, construction machinery, agricultural machinery, ships, generator sets and other fields. At present, heavy trucks, medium and heavy construction machinery and agricultural machinery have basically achieved 100% engine supercharging, while the turbocharger configuration rate of diesel engines in the passenger vehicle field is 62% and that of gasoline engines is only 5%. In 2012, the comprehensive configuration rate of turbochargers in the internal combustion engine industry reached 6.70%, an increase of nearly 3 percentage points compared with 3.77% in the internal combustion engine industry in 2005. The sales volume of turbochargers in China in 2012 was about 5.16 million, an increase of about 3.66 million compared with 1.5 million in 2005, with an average annual compound growth rate of 19.30%. It is expected that in the next five years, the output of domestic internal combustion engines will increase rapidly, the comprehensive configuration rate of turbochargers will steadily increase to more than 12%, and the compound growth rate of turbocharger demand will reach 19.55%.
The company is the first of the "top three" of national superchargers.
The company specializes in the research, development, manufacture and sales of internal combustion engine supercharger, and is the main professional manufacturer of internal combustion engine turbocharger in China. The matching internal combustion engine is mainly used in commercial vehicles and construction machinery and other fields. Downstream customers are mainly Weichai Power, Chaodao Yitz, Beiqi Futian, Dongfeng Chaochai, Shangchai Power and other major internal combustion engine main engine factories. At present, international manufacturers engaged in turbocharger production include Honeywell International Inc, BergWarner, Mitsubishi heavy Industry, Ishikawa Island sowing Mill heavy Industry, Cummins and so on. In 2012, the global demand for mainframe turbochargers is about 33 million, with the top five taking 84% of the market. In China, the sole proprietorship and joint ventures of the top five foreign brands occupy more than 60% of the Chinese market share; national turbocharger production enterprises present a competitive pattern of "one super and three top three", which refers to Hunan Tianyan, accounting for 11.43% share; as one of the top three (as well as Weifang Fuyuan and Ningbo Weifu Tianli) accounts for about 6% market share.
Future growth depends on gasoline engine superchargers and high-end diesel commercial vehicle turbochargers.
At present, the company mainly deals in small turbochargers and medium-sized turbochargers, while large turbochargers are still in the stage of trial production and have not entered mass production; from 2009 to 2013, the company's operating income and net profit grew at an average annual compound growth rate of 18.8% and 18.4%. This time, the company plans to issue no more than 16.67 million shares and raise 139.0874 million yuan, which will be invested in two projects: the turbocharger expansion project and the technology center expansion project, with a construction period of two years. After the fund-raising project has fully reached production, the annual production capacity of the new turbocharger will reach 300000 units, the total production capacity will reach 660000 units, the annual sales income will be 216.814 million yuan, and the total annual profit will be 4781.1 million yuan. In the next five years, the company will strive to develop into a leading domestic national turbocharger brand, while constantly expanding the existing turbocharger market share at home and abroad, steadily and effectively carry out the research, development and application of gasoline engine superchargers and all kinds of high-end turbochargers and other new products.
The reasonable price range is 13.5 to 16.9 yuan.
From the simple calculation of raising funds and issuing shares, the company's offering price is expected to be around 8.34 yuan. We estimate that the company will achieve earnings per share of 0.45,0.55 and 0.70 yuan respectively from 2014 to 2016. According to 20-25 times PE, the reasonable price is 13.5-16.9 yuan.
