All the questions in the market have been answered positively.
The market has always questioned the transformation of Wanze shares from real estate to superalloys. The doubt mainly focuses on two points: first, as a real estate company, can it really make a superalloy with high technical barriers to production? Second, the downstream of superalloy is concentrated in aviation and military industry. As a private enterprise, can its products be accepted downstream? The answer has been found in the feedback from the CSRC released by the company on March 6.
The rate of good products in the pilot line has exceeded 30%. Wanze Central South Research Institute has completed 5 batches of less than 20 pieces of small pilot test, 3 batches of less than 100 pieces of pilot test, and 1 batch of less than 200 pieces of small batch production, the trial-produced products have reached 90% qualified rate of size and 50% qualified rate of metallurgy, that is, the pilot test target of overall yield of more than 30% has been achieved. The company has commissioned a military enterprise to carry out technical testing of the pilot products, through third-party testing to ensure the effectiveness of the pilot results. The product research and development of the fund-raising project has completed the pilot stage, has the complete preparation capacity of small-scale mass production, and has the conditions to shift from R & D to mass production.
The subsidiary of the company has obtained the certification of national military standard. At present, Shenzhen Wanze Airlines has obtained the GJB9001B-2009 national military standard quality management system certification certificate registered as 02616J20392R0M; according to the certificate issued by Guangdong Provincial Office of Science, Technology and Industry for National Defense, Shenzhen Wanze Aviation has completed the preliminary examination and on-site examination of confidentiality qualification of Guangdong Office of Science, Technology and Industry for National Defense, and the confidentiality qualification certificate is in the process of processing.
There are already cooperative customers in the military field. At present, the company has signed a letter of intent for strategic cooperation with a large domestic aero-engine maintenance enterprise, which mainly includes the maintenance of hot-end components of gas turbines and the maintenance of APU core components of civil aviation. During the reporting period, Wanze Central South Research Institute has provided the enterprise with leaf composition inspection and maintenance services. In April 2016, the company signed a cooperation agreement with the company on the development of a certain type of high-pressure turbine rotor blade, and now it has achieved sales revenue.
The company has signed a cooperation agreement with a military factory, and the two sides have cooperated in the development of a certain type of powder metallurgy high pressure turbine disk. The civil sector has also signed cooperation agreements with Jiangsu Longda Superalloy Aviation material Co., Ltd., Shaanxi Hongyuan Aviation forging Co., Ltd., to provide entrusted R & D services in the field of superalloy master alloy and superalloy forging respectively.
Shanghai Wanze precision casting is expected to be put into production in 18 years. In addition to Shenshan Wanze Precision, which is a non-public offering project, the company's superalloy production line will also use 750 million of its own funds to invest in Shanghai Wanze precision casting. The project is expected to be put into production in 2018, with a design capacity of 200000 equiaxed blades and 2.4 million equiaxed turbines.
Profit forecast and investment advice: the company's transformation of superalloy has achieved phased results, and questions about market concentration have been answered. With the completion of the superalloy project, the company's performance will increase. We forecast that the diluted EPS of the company's non-public offering from 2017 to 2019 will be 0.16,0.25,0.67 yuan respectively, corresponding to the company's closing price of 15.95 yuan on February 27th, and the dynamic pinning E will be 99 times, 63 times and 24 times respectively, maintaining the company's "overweight" rating.
Risk hint: the risk of postponement of non-public offerings and the risk that the development of downstream industries does not meet expectations.