Basic conclusion
The company is a professional domestic engine valve manufacturer: the company's main products are engine valves, and its main business is the domestic diesel engine OEM market and export AM market, in which diesel engine business is the main source of revenue and profit. At present, revenue accounts for about 60%, 70%, and gross profit is expected to account for more than 90%.
The OEM demand for domestic diesel engines may fluctuate greatly, and the international AM market is generally stable: on the one hand, diesel engine valves are mainly equipped with commercial vehicles such as heavy trucks, but the demand for heavy trucks has always fluctuated greatly, so the domestic diesel engine demand may also fluctuate greatly. On the other hand, the company's main export markets are the United States, Brazil, etc., the United States and other European and American countries have a large scale of car ownership and overall stability, which is bound to bring stable export maintenance demand.
The market competition pattern is highly concentrated, and the company has a certain competitive advantage: the domestic automobile engine valve OEM market concentration is relatively high, and the enterprises with an annual output of more than 20 million mainly include Jinan Ward, Mahler Sanhuan and Dengyun shares, etc., and the combined output of the three enterprises reaches about 40% of the total market. The company's production and sales volume ranks third in China, with a certain scale, technology and customer resources advantages.
Initial progress has been made in the development of new customers, and the development of the company may be accelerated: relying on the company's existing customers, the development of diesel engine business with traditional advantages will have a more solid guarantee. Moreover, the company has entered the supply system of Caterpillar Inc and Changan Mazda in 13 years, and has obtained orders to start mass production. It is expected that the matching proportion will be further increased in 14 years, and the development of the company may be accelerated under the leadership of new customers.
The new 20 million production capacity of the fund-raising project is expected to promote the growth of the company's sales: the company intends to raise about 200 million yuan this time, mainly for the construction of 20 million automobile engine valves and the construction of provincial technology centers. The construction period is expected to be 5 years, and the total production capacity of the company will increase by about 85% after it is put into production. The company says the new capacity will be enough to be absorbed by new orders.
Value Evaluation and Investment suggestions
We forecast that the company will achieve operating income of 3.08,3.56 and 402 million yuan respectively in 13-15 years, and the net profit attributed to the parent company will be 3389 yuan, 4284 yuan and 49.05 million yuan respectively, down 14.1% from the same period last year, an increase of 26.4% and 14.5% respectively, and the corresponding diluted EPS is 0.38,0.48,0.55 yuan. Considering comprehensively, the company is given 15-18 times PE for 14 years, corresponding to a reasonable price of 7.28.6yuan. The company has set the offering price at 10.16 yuan, which we think is obviously on the high side, so we do not recommend getting involved in the company for the time being.
Risk hint
The sales volume of the heavy truck industry declined more than expected, the risk of a sharp rise in raw material prices, and insufficient utilization of new capacity.
