Main points of investment:
Focus on motor stator and rotor stamping, iron core, customers gather the world's top 500 enterprises.
The company's main business is the research and development, production and sales of motor stator and rotor stamping sheet and iron core. The motor is mainly composed of stator and rotor, the total cost of which accounts for about 30%. The quality and performance of the stator and rotor core directly determine the performance, energy efficiency and stability of the motor.
The company has been working in the field of motor parts for more than 20 years. In 2005, the company cut into Cummins supply system. Take this as a breakthrough, expand the expansion of the world's top 500 customers, and gradually optimize the customer structure. Up to now, the company has established stable cooperative relations with leading domestic and foreign motor manufacturing companies, such as Cummins, Shanghai Mitsubishi, Kohler, Vestas, ABB, Siemens, General Electric Co, Gamesa, Bombardier, Toshiba Mitsubishi, Lilisamar and Meodi.
High-quality customers build entry barriers and continue to improve their technical level.
By cutting into the supply system chain of the world's top 500 enterprises, effectively and continuously promote the improvement of the company's R & D, technology and other standards, and build certain customer entry barriers:
(1) the technical level continues to improve. Through synchronous development with overseas customers, the company has a high standard in research and development, technology, supporting services and other aspects. High-quality leading customers share the latest process concept and processing technology with the company, which has a continuous promoting effect on the technology improvement of the company.
(2) build barriers to customer entry. At present, the company's top 500 enterprise customers generally choose suppliers of stator and rotor punching sheets and iron cores of 2-3 household electrical appliances, which have strict requirements on supplier production scale, product quality, technical research and development, service, etc., and the certification procedure is strict and complicated. the investigation period and running-in period are long. Once the supplier is identified, it will not be easily replaced. Therefore, for potential new suppliers, it is difficult to cut in. Through years of cooperation, the company has further consolidated the barriers to market entry.
(3) the payment is in good condition. In the face of the world's top 500 customers, the company is in good condition. It is a strong support for the company's operating environment and performance.
(4) the scale effect is prominent. In 2016, the sales of the top five customers accounted for 52% of the company's operating income. At present, the production of stamping sheet and iron core needs high-precision punch and other equipment, and the customer concentration is high, which makes a large single order, which further drives the scale effect.
Small micro motors and motor manufacturers bring their own processing factory business to further open up the company's business space.
At the industry level, according to the incomplete statistics of Technavio and other institutions, the annual sales revenue of the global motor manufacturing industry is expected to exceed US $200 billion by 2019. According to the proportion of 30% of the output value, it is estimated that the market space for stator and rotor punching sheets and iron cores is about US $60 billion. For the company, we believe that the supporting products of small and micro motors and the divestiture of their own punching factory business will further open up the market space for the company.
The company's original products are mainly medium and large motors. From the point of view of the industry, the supporting products of small and micro motors in electric vehicles, automation and other fields can also be expanded. The company has been supporting products for Easton and other customers for two years. We believe that the company's further expansion of supporting products for small and micro motors is worth looking forward to in the future.
At the same time, from the perspective of industrial trend, some motor manufacturers gradually adjust the vertical industrial layout and divest their own punching factories to further open up the market space for third-party suppliers such as the company.
Fund-raising projects can effectively relieve the pressure on the company's production capacity.
Before listing, the company's capacity constraints affected the further expansion of customers to a certain extent. In 2016, the company produced about 40,000 tons of stator and rotor punching sheets and iron cores.
After the completion of the company's high-end motor stator and rotor stamping and iron core production base project, the production capacity of motor stator and rotor stamping and iron core will be increased by 30,000 tons per year. As well as the construction progress of the project, we expect to gradually release production capacity in the second quarter of 2018. The commissioning of fund-raising projects is of great significance to alleviate the bottleneck of existing production capacity, open up new customers in the existing lower reaches, and extend the product line.
Profit forecast and investment advice.
We expect the company's net profit from 2017 to 2018 to be 50.9774 million yuan and 59.7389 million yuan respectively, an increase of 11.68% and 17.19% over the same period last year. Corresponding to earnings per share of 0.42 yuan and 0.50 yuan. The company's customer structure is high-quality, with the production capacity of fund-raising projects, as well as the development of small micro motors and other new business, will gradually enhance the company's business growth potential.
Considering the valuation level of secondary new shares, investment rating is not granted for the time being.
The main uncertain factors. Market competition risk.