Report guide
The company as a domestic rail transportation supporting leading enterprises, with the prosperity of the rail industry is improving, the company IPO capacity expansion will usher in development opportunities.
Main points of investment
Jinchuang Group: the leading enterprise of domestic rail transportation
The company mainly provides supporting products for rail transit vehicles such as EMU, urban rail and ordinary passenger cars. In 2016, EMU products accounted for 40.29% of revenue, urban rail products accounted for 41.12%, and EMU products accounted for 42.45% of the domestic market. From a regional point of view, the company's revenue in mainland China accounted for 81.43% in 2016, 15.7% in overseas areas, and 2.87% in other regions. At the operational level, affected by the slowdown in bidding for the railway EMU in 2016, the company's revenue growth declined sharply, and the market stabilized in 2017. the revenue of many projects in cooperation with CRRC confirmed that the company's revenue in the first half of the year was 1.234 billion yuan, an increase of 29.49%. The growth rate began to stabilize.
The prosperity of the rail transit industry is improving. In 2018 or to meet the turning point of EMU, the market demand mainly comes from three aspects:
1) demand driven by the opening of new lines: the market demand of EMU may exceed expectations in 2018, and the rail transit industry will reverse. According to the annual working meeting of the General Railway Federation, China's "four vertical and four horizontal" high-speed rail network has been completed and put into operation ahead of schedule. The country's new railway lines will reach 4000 km in 2018, an increase of 31.67% over the same period in 2017, of which 3500 km is high-speed railway. according to the calculation of 10 standard trains per 100 km, the new opening of high-speed rail will bring the procurement demand of the 350th standard train of EMU trains in 2018. coupled with the procurement demand of inter-city railways, the actual number of new EMU trains delivered in 2018 is expected to reach 400,450 trains (the total procurement number of 105gam245 trains in 20162017). The 13th five-year Plan brings deterministic demand for EMU, and "Fuxing" will become the main model. By 2020, the mileage of railways in operation across the country will reach about 150000 km, including about 30,000 km of high-speed railways. The number of EMU has reached about 3800 standard groups, of which "Fuxing" bullet train has more than 900units.
2) demand driven by the encryption of existing lines: based on the estimated mileage of 22000 km of high-speed railways at the end of 2016, the density of high-speed railways that have been put into operation will increase by 1 train for every 100 km, and the demand will increase by 220km.
3) the demand brought by the maintenance market: it is estimated that ten years after China's bullet trains are put into production on a large scale, that is, after 2017, a large number of online bullet trains will need five-level maintenance and two-level five-level overhaul. as the five-level maintenance will carry out large-scale replacement of motor car parts, the maintenance market will show substantial growth, and the maintenance market capacity in 2018 is expected to be 180 standard columns.
In terms of urban rail: according to the white paper "Transportation Development in China", the operating mileage of urban rail transit will be increased by about 3000 km during the 13th five-year Plan period. based on the vehicle density of 6 vehicles per kilometer, the new urban rail mileage from 2016 to 2020 will bring demand for nearly 18000 urban rail vehicles, with an average of about 3600 vehicles per year.
The focus of the company: the customer's quality ROE is high, and the production capacity of the project is expected to double after reaching production.
The company's customer base is high-quality and stable, the domestic major customer is CRRC Corporation, the main international supporting Bombardier, Alstom, Siemens and so on, to ensure the company's performance growth. The company's ROE level is much higher than that of the same industry. By estimating the level of net assets (2017Q3 net assets plus funds raised) after the company's IPO issue, even based on the 2016 homing net profit, the company's ROE level is still close to 20%, which is still at a high level. After the successful completion of the fund-raising project, according to fixed assets investment estimates, the expansion of about twice the production capacity, will increase the annual net profit of 166 million yuan, thus calculating that the post-listing ROE can reach about 28.6%.