Introduction to this report:
The traditional main business forces the company to set up in the aviation field. Wang Lizhi's appointment means that the company will accelerate the layout of the aviation business and maintain the rating for increasing its holdings.
Investment highlights:
Maintain the increase in holdings rating. Considering that downstream customers of molybdenum concentrate will not continue to sign orders, the 2016-2017 EPS was lowered to 0.09/0.39 yuan (originally 0.25/0.52 yuan). Considering the high probability that the company's monocrystalline blades were successfully sent for inspection, subsequent technological breakthroughs ushered in high growth room, maintaining the target price of 37.2 yuan, and maintaining the stock increase rating.
The performance is in line with expectations, and transformation is an inevitable choice. In 2015, the company's revenue/net profit was 155/60 million yuan respectively, down 36%/28% from the previous year. The main reason for the decline was the termination of the agreement previously signed by Copper and Military Materials to supply 1,000 tons of molybdenum concentrate this year. Trial production of the company's molybdenum and rhenium separation project was completed in 2015. With the price of molybdenum concentrate falling and the execution of long orders, the downturn in traditional business may force the company to accelerate the deployment of deep processing fields. Subsequent deep processing of molybdenum and rhenium ore - > rhenium metal - > rhenium alloy - > single crystal blade deep processing is expected to be given great attention.
The change in management team is significant, and the aviation layout is expected to accelerate. On March 24, the company's board of directors decided to appoint Mr. Wang Lizhi as the company's deputy general manager to oversee the company's aviation business. Wang Lizhi is a top international talent brought in by the Central Organization Department's “Thousand Talents Program”. He has 30 years of relevant experience in aero engine parts R&D, manufacturing, installation testing, maintenance, and quality control. He has worked successively for companies such as Honeywell in the US, Smith Aerospace Equipment in the UK, GE Aviation Systems in the US, and Rolls-Royce Aero Engine in the UK. We believe that Wang Lizhi's appointment shows the importance the company attaches to aviation business, and that the layout in the field of monocrystalline blades -> engines -> drones may continue to accelerate.
Catalyst: The monocrystalline blade was successfully sent for inspection and launched, order.
Risk warning: Risk of unsuccessful inspection of single crystal blades.