The company is an one-stop supporting leader of domestic rail transit vehicles, which can provide one-stop package service. The company starts with the built-in products of rail transit vehicles, and constantly enriches the product types through nearly two decades of endogenous and extension development. At present, it has covered more than 1000 supporting product types of rail transit vehicles, and has the production capacity of 7 of the 10 supporting systems of EMU. It is one of the enterprises with the largest category and span of supporting products of rail transit vehicles in our country. The competition between the company's EMU and the built-in products of the urban rail subway is obvious, and the city takes the lead, which can provide one-stop package service for design, production and maintenance.
The comprehensive product layout and the promotion of the smart factory will help the company to reduce cost and increase efficiency. We believe that the profit side of the company is expected to grow in the future, the main reasons are: (1) in terms of interior, the company can provide customers with one-stop package service, reduce customer separate bidding fees, enhance customer stickiness and get more profit space at the same time. With the help of the built-in layout, the company's equipment products are also easier to infiltrate the customer supply chain. (2) the company's main products have the characteristics of non-standard, small batch and high requirements, and the optimization of this business model management and production mode is very important to improve production efficiency. At present, the company promotes the construction of smart factories and has realized the Internet of things for some equipment in the plant. Through big data's management, the company has achieved cost improvement and efficiency improvement.
The supporting products of urban rail and subway vehicles benefit from the newly built and maintenance market, which is growing at a high speed. According to our estimates, the demand for urban rail transit vehicles in 2020, 2021, and 2022 is 7563, 11158, and 11572 respectively, with an average annual compound growth rate of 26.7%. As the leading enterprise of urban rail and subway supporting products, the company will fully benefit from the growth of industry demand. We estimate the maintenance market according to the launch cycle of rail transit vehicles, and it is expected that the demand for urban rail transit vehicle maintenance will gradually increase after 2020, and at the same time, the demand for overhaul will increase significantly.
We estimate that in 2022, the demand for urban rail transit vehicle erection and repair will be 2963, 4387, 4978 and 2806, 1660, 2666, respectively. The comprehensive strength of the company is strong, the product variety is rich, the network layout is extensive, and the competitive advantage is obvious in the urban rail vehicle parts maintenance business.
The increment of EMU supporting products mainly comes from the maintenance market. We believe that the line density of EMU will gradually pick up in the future, which will lead to new demand for EMU. We predict that the demand for 2020max 2021pm in 2022 is 348pm 328pm 321 respectively, which is still at an all-time high.
Long-term stable cooperation between the company and downstream customers, the company EMU supporting product business will continue to maintain steady development. In terms of maintenance and maintenance of EMU, according to our estimates, the demand for third-level repair / fourth-level repair / fifth-level repair of 2020 EMU reaches 5270.401x90 respectively, and the corresponding maintenance market space reaches 14.36 billion. At present, the company has completed the layout of a number of EMU maintenance outlets, waiting for the fourth or fifth level of market repair volume.
With the global layout of the company, overseas markets continue to make efforts. The company is an industry leader in global layout, and has set up subsidiaries in France, Britain, Singapore, India and other places. In 2019, the company further deepened strategic cooperation with Bombardier and Alstom. The company's overseas business breakthrough has been reflected in the order. In 2019, the company signed a new overseas order of 1.698 billion yuan, setting a new high. It is expected that the company's overseas business will grow rapidly in the future.
Investment suggestion
It is estimated that the company's net profit from 2020 to 2022 will be 473,614,768 million yuan respectively, an increase of 19.6%, 29.8% and 25% respectively over the same period last year, and the corresponding PE will be 15.3,11.8 and 9.4 times respectively, covering the "buy" rating for the first time with a target price of 12 yuan.
Risk factors.
The risk of rail transit investment reduction; the risk of raw material price fluctuation.