Superalloy is the focus of policy. The manufacture of superalloy materials and components has always been a key project supported by the state. At present, the manufacturing technology of high-end superalloys and parts is mostly in the hands of foreign enterprises, which seriously limits the development of aero-engine industry chain. The company set up Wanze Central South Research Institute as early as 14 years, introducing superalloy talents at home and abroad, all of which are experts of the national "Thousand talents Plan" and began related research work. At present, a precision casting engineering center of 1600 square meters has been established as an engineering base for precision casting blades. In the research and development of superalloy master alloy technology, more than 300 furnaces have been successfully smelted, the core technology system of ultra-high purity superalloy melting has been established, and key technologies such as vacuum induction furnace melting experiments have been developed. In the first half of the year, the company broke through the key technical difficulties, completed the development task of a certain type of turbine blade, and successfully used the process system to produce a batch of qualified blades for a cooperative unit. At present, the company has mastered the advanced technology of high temperature master alloy and blade manufacturing, and is expected to break the foreign technology blockade and achieve performance growth under the dual advantages of policy and technology.
Mass production of aviation projects is just around the corner. The company has steadily advanced the development of superalloy blades and other products, has completed the pilot test, and has the technical basis for large-scale mass production. In the first half of the year, the company's manufacturing business achieved revenue of 957000 yuan, profit of 662000 yuan, and has begun to make a profit. The 16-year non-public offering project plans to build a new production line with an annual production capacity of 250 tons of ultra-pure high temperature master alloy, 39600 pieces of advanced engine blades and 60 tons of superalloy powder. At present, civil construction work has been started and equipment bidding has been started, which is expected to be completed in 2018. After reaching production, the project is expected to achieve an operating income of 285 million yuan and a net profit of 351 million yuan.
More than half of the military industrial qualifications lay the foundation for the volume of aviation projects. Shenzhen Wanze Airlines, a subsidiary of the company, has obtained the certification certificate of the national military standard quality management system, and has been approved as a third-level military industrial secrecy qualification unit, and is actively promoting weapons and equipment scientific research and production license and qualification list certification of weapons and equipment production units. The speed at which the company has obtained military industrial certification is basically consistent with the progress of production line construction, which is expected to lay the foundation for the volume of aviation projects.
Civilian projects are progressing steadily. Shanghai precision casting, a subsidiary of the company, is mainly engaged in the industrial production of equiaxed crystal blades and equiaxed crystal turbines, mainly used in civil gas turbines, etc., with a planned investment of 750 million yuan and expected to be put into production in 18 years. Design capacity of 200,000 equiaxed blades and 2.4 million equiaxed turbines. Compared with the military aerospace project, the civil superalloy market is more stable. After the completion of the project, the company is expected to enter the middle and high-end civil superalloy market, the product line is more complete, revenue and profit may be more stable.
Profit forecast and investment advice: we forecast that the company's net profit from 2017 to 2019 is 16 million, 103 million and 278 million respectively, and its EPS is 0.03 yuan per share, 0.21 yuan per share and 0.57 yuan per share, respectively, corresponding to the closing price of 15.5 yuan on September 15th, and the dynamic PE is 492,79 and 29 times respectively. In view of the steady progress of the company's superalloy project, the military industrial certification has been successfully completed. Maintain the company's "overweight" rating.
Risk hint: the risk of delay of non-public offering and the risk that the development of downstream industry does not meet expectations.