Event

On March 3, 2017, Xinhua News Agency reported that the development of China's heavy launch vehicle has officially launched the previous key technologies and deepened demonstration of the program. At present, breakthroughs have been made in rocket engine technology, and the first generator-turbine pump joint test has been completed. The heavy carrier rocket, to be named long March 9, is expected to be the largest rocket in the world and can meet the needs of Mars exploration and further deep space exploration.

According to a report on the website of the Aerospace Science and Technology Group, when Lei Fanpei, chairman of the group, went to the sixth Academy of Aerospace Science and Technology in early March, he pointed out that it is necessary to strengthen the cultivation of key projects and do a good job in the research and application of asset securitization and financing.

Business analysis

The long March 9 rocket is expected to become the largest rocket in the world: according to Xinhua News Agency, China's heavy rocket was approved in June 2016 for tackling key technologies and deepening the demonstration of the program. the main contents are "one general and three": the overall technology and scheme optimization of heavy rockets. The design, manufacture and test of 10m large diameter arrow structure, 480 ton high thrust liquid oxygen kerosene engine and 220 ton high thrust hydrogen oxygen engine. The long March 9 heavy carrier rocket has a thrust capacity of more than 3000 tons, a low-earth orbit carrying capacity of more than 100 tons, and an earth-moon transfer orbit carrying capacity of more than 50 tons, which can meet the needs of future manned lunar landings, Mars exploration and deep space exploration. If the first flight is successful, the rocket's carrying capacity will be more than five times that of the existing rockets, which is expected to become the largest rocket in the world.

The 480-ton thrust engine will meet the requirements of manned lunar landing: the 480-ton thrust liquid oxygen kerosene engine for heavy carrier rockets bundled with booster and core primary power is the largest thrust rocket engine currently being developed in China. it is of great significance for supporting the construction of follow-up space stations, manned lunar landings and deep space exploration. The engine was established in 2011, completed the single thruster combination ignition (coordination) test last year, and completed the generator-turbine pump joint test this month. The development of the engine will greatly accelerate China from a country with light and medium carrier rockets to the ranks of countries with heavy carrier rockets.

The direction of asset securitization of the Aerospace Science and Technology Group is clear: the Aerospace Science and Technology Group has clearly proposed to increase the asset securitization rate from 15% to 45% during the 13th five-year Plan period. The 13th five-year Plan of the sixth Aerospace Academy proposes that it will achieve outstanding results in the field of asset securitization and achieve listing as a whole. When Lei Fanpei, chairman of the Aerospace Science and Technology Group, went to the sixth Academy for research in early March, he pointed out that it is necessary to do a good job in the research and application of asset securitization, financing, and other aspects. We believe that after the integration of aviation and marine engine assets, there is also a strong expectation of integration of aerospace engine assets of the Aerospace Science and Technology Group, which is expected to take the lead in promoting securitization within the group. Aerospace Power, as the only listed platform of the sixth Institute, will undertake a more important mission.

Investment suggestion

Considering the huge high-quality assets and strong restructuring expectations of the sixth Aerospace Institute, from the perspective of market capitalization, 15 billion of the market capitalization of listed companies is unable to carry the huge volume of aerospace engines. From a long-term point of view, the target of the 13th five-year Plan of the sixth Aerospace Academy is 34 billion yuan in annual income and 1.7 billion yuan in annual profits, and the market capitalization target after asset integration should be more than 50 billion yuan. We give Aerospace Power a "buy" rating, with a target price of 40 yuan in the next six months.

Risk hint

The reform was lower than expected.