Events:
On August 29, 2016, the company received the notice of the Transportation Bureau of China Railway Corporation on the loading and operation examination of CRH380B EMU, which informed that the powder metallurgy brake disc for CRH380B EMU (BZ-A0350-000m) developed and produced by the company has been approved by the Transport Bureau of China Railway Corporation and approved to carry out loading and operation examination in the CRH380B-5658 EMU assigned by Beijing Railway Administration.
Comments:
Brake pads of high-speed railway begin loading test, and income is just around the corner.
The "powder metallurgy brake pad for CRH380B type EMU (BZ-A0350-000type)" developed and produced by the company is approved for loading, which is a key link in the industrialization of the company's high-speed train brake pad project, which indicates that the company's high-speed rail brake pad project has taken another important step forward, and formal loading is just around the corner. We expect that the company's high-speed rail brake pads will complete the loading test and achieve revenue by the second half of next year at the earliest.
The market space of high-speed rail brake pads is huge, and the company has obvious advantages.
We conservatively estimate that the current market capacity of brake pads for high-speed EMU trains in China is about 6 billion yuan. Assuming that the total mileage of China's high-speed rail operation will reach 30,000 km in 2020, and the train density of high-speed rail remains at the current level of 0.75 vehicles / km, the market capacity of high-speed rail brake pads will also reach about 12 billion yuan. the compound growth rate of market capacity in the next five years may reach about 15%. There is a huge market for high-speed rail brake pads in the future.
The company has accumulated for many years in the field of high-speed EMU train brake pads. at the same time, the diamond field the company is in also uses powder metallurgy technology, which makes the company has a natural advantage in the process of turning to manufacturing brake pads. According to the current progress, the company will sell high-speed rail brake pads and generate revenue in the second half of 2017 at the earliest. We expect that in the first year of entering the high-speed rail brake pad market, that is, 2017, the company will get a market of 3000-5000 brake pads, that is, revenue of 2100-35 million yuan. By 2018, the company is expected to get 5% of the brake brake pad market, that is, about 3-480 million yuan in revenue, and is expected to reach about 20% in 2020.
Profit Forecast and Investment rating
After years of efforts, the company has finally begun the formal loading test of high-speed rail brake pads, and we expect the company to realize the industrialization of high-speed rail brake pads in the second half of 2017 at the earliest; at the same time, in the field of traditional main diamond tools, the company seeks the transformation of products from mid-end to high-end, as well as the transformation of key market areas from domestic to foreign.
Therefore, we are optimistic about the development of the company for a long time and continue to maintain the "buy" investment rating of the company. It is expected that the company will achieve EPS of 0.09,0.15 and 0.26 yuan per share respectively in 2016.