Core ideas:
The comprehensive service provider of coal gasification technology has sustained rapid growth in recent years. The company is engaged in the research and development of coal gasification technology and key equipment, design, technical services, complete equipment supply and project general contracting. The revenue / return net profit in 2011 is 10.44 / 228 million yuan, and the revenue and return net profit CAGR in 2013-2013 is 31.5% and 23.7%. The company's main business is patent proprietary and general equipment sales, accounting for nearly 80% of revenue in 2013. The controlling shareholder is the China Academy of launch vehicle Technology, with a stake of 58.82%.
The coal chemical industry has a huge market demand and broad development prospects: it is estimated that the total investment scale of the three new types of coal chemical industry, such as coal-to-gas, is about 860 billion yuan during the period from 2014 to 2018. Among them, the total investment of coal-to-natural gas is about 460 billion yuan, that of olefins / aromatics from coal is about 240 billion yuan, and that of coal-to-oil is about 160 billion yuan. It is conservatively estimated that the demand for coal chemical equipment will exceed 500 billion yuan. With the upsurge of investment enthusiasm in the coal chemical industry in Northwest China, there is a broad space for coal gasification equipment and projects in the future.
The company has outstanding competitive advantages: (1) Technology and talent advantages: the aerospace pulverized coal pressurized gasification technology with independent intellectual property rights is in the leading level at home and abroad. (2) R & D advantages: in the process of R & D, the company can make full use of the R & D achievements and conditions in the aerospace field to realize the transformation and extension of military technology to civilian industry. (3) advantages of project management: the company has complete engineering database, standard library and software system to realize integrated operation. (4) the whole life cycle service advantage of the project: the company can provide the whole life cycle service of coal gasification project construction according to the needs of the owner.
Driving factors for the company's future growth: (1) broad demand downstream of the industry: in 2013, China's external dependence on natural gas / crude oil and oil / ethylene reached 31%, 60%, 10%, respectively. The growing consumer demand for products such as energy and chemical industry provides a good market opportunity for the coal gasification engineering industry. (2) continuous technological innovation: the company's R & D expenses accounted for 4% of revenue in 2013, and the new R & D achievements will help to expand market share and open up new growth space. (3) Capital and brand advantages to expand the industrial chain: the improvement of capital, brand and comprehensive strength after listing will enable the company to break through the bottleneck of insufficient production capacity, extend service content, and accelerate the pace of extension expansion. (4) the performance of sufficient on-hand orders continues to grow: the total amount of orders executed by the company is about 12 billion yuan, which is 11.5 times of the revenue in 2013, and the future performance settlement is fully guaranteed.
Risk factors: national industrial policy change risk, oil price fall risk and so on.
Reasonable valuation range of 14.03-18.3 yuan: we estimate that the company's EPS in 2014-16 is 0.60, 0.77, 0.98 yuan and CAGR, respectively, 20.8%. The comparable company's PE was 22 times in 2015, and we think it can give the company 22-28 times PE in 15 years, with a reasonable value range of 16.9-21.6yuan. DCF is valued at 19.31 yuan. The company intends to issue the corresponding theoretical price of no more than 12.52 yuan.
