Summary of the report:
The traditional business is stable, tamping the leading position of the heat-shrinkable casing subdivision industry, and the domestic alternative permeates to the high end. The United States, Japan, South Korea and other developed countries began to develop and produce heat-shrinkable materials around 1960, occupying a leading position in the world for a long time. After more than 30 years of development, Chinese enterprises represented by Wall nuclear materials have become mature in technology and stable in product performance, and firmly occupy the middle and low-end market of heat-shrinkable materials in the field of electronic and power-related products. In the future, with the rise of domestic automobile manufacturers and automobile wiring harness manufacturers, domestic heat-shrinkable materials are expected to gradually infiltrate into the high-end heat-shrinkable materials market and effectively replace imported products.
Business diversification is progressing smoothly, downstream industries need more blossoms, and market share is expected to continue to break through. The incremental market of Wall nuclear heat-shrinkable materials business is mainly distributed in rail transit, energy industry, automobile manufacturing and other fields. Driven by the national policies such as the 13th five-year Plan, the mileage of high-speed rail and urban rail transit has continued to increase, the scale of national power grid investment has been steadily promoted, and the expectation of oil and gas pipeline construction is clear. all these have brought long-term and considerable downstream demand for the heat-shrinkable materials industry. We believe that as a representative of domestic heat-shrinkable materials, the company's market share in these areas will have the opportunity to achieve breakthrough growth in the future.
With the active layout of the new energy industry, the fixed wind farm project is gradually entering a profit period, and the car charging pile is expected to break out. Wind farm power generation has the advantages of pollution-free, renewable and low operating cost. the strategic layout of the company has entered the field of wind farm power generation operation. with a number of wind farms put into operation, it will gradually enter the performance release period. With the rise of new energy vehicles, "the demand in the field of charging piles is strong. Through strategic investment in power gathering technology, Wall Nuclear Materials has achieved a new growth point of performance in the field of charging piles. At the same time, it is conducive to the coordinated sales and performance growth of heat-shrinkable materials in the field of new energy vehicles and charging piles.
Give a "buy" rating. We are optimistic about the future development of the company as the domestic heat-shrinkable casing subdivision leader, and the company's endogenous extension has formed four major business sectors of electronics / power / wires / new energy (including wind power), which will provide the company with new medium-and long-term growth points. We estimate that the EPS of the company from 2017 to 2019 is 0.08 soybean 0.14 yuan 0.18 yuan, and the corresponding price-to-earnings ratio is 85.2 pound 47.2 prime 36.7 times, giving a buy rating.
Risk hint: the competition in the heat-shrinkable material industry intensifies, and the profit of the wind power business is lower than expected.