Benefiting from the domestic rush to install, the company's sales of wind power-related products have increased significantly. Taking advantage of its advantages in the high-power market and offshore market, we believe that the performance of wind power-related products is highly stable and has a large expectation gap with the market point of view. At the same time, the automotive composite market is rapidly growing under the lightweight demand, and we are optimistic about the huge long-term growth space of the company's revenue. We believe that the company's 28 times PE in 2020 is a more reasonable valuation level, with a target price of 86.8 yuan and a "buy" rating for the first time.
Fiberglass composite material leader, the business scale is growing rapidly. Shuanyi Technology is a domestic leader in composite materials, and its main products include wind turbine cabin cover, wind power blade root, large non-metallic mold, engineering and agricultural machinery and equipment covering parts, etc. After years of professional operation, it has established long-term and stable business relations with global famous enterprises such as Vestas, SiemensGamesa and Xinjiang Goldwind Science & Technology, and is a leading supplier of wind turbine cabin cover and composite shell of engineering vehicles in China. With the quality advantage of high-end products and the continuous launch of production capacity, the company's business scale is growing rapidly.
The rush to install the market has led to a substantial increase in sales of wind power products, and the company is expected to maintain its performance with the advantage of high-power products.
Taking into account the pace of subsidized decline and the 1-1.5-year delivery cycle of turbines, onshore wind power is heavily installed in 2020, and the tender for offshore wind power is expected to be completed in 2020-2021, so the company's sales of wind power products such as engine cabinets are expected to increase significantly. On the other hand, with its leading advantage in large-size products and relatively stable supply relationship with downstream leading manufacturers, we believe that the company's revenue volume of this business will remain at a high level after the rush to install the market.
Benefiting from the trend of lightweight, automotive composite products are expected to increase. Under the policy background of energy saving and emission reduction, the process of automobile lightweight is developing rapidly. Glass fiber composites are expected to replace some traditional metal materials by virtue of their advantages such as high strength, high temperature resistance and corrosion resistance, and good processability. The life anxiety of new energy vehicles will also accelerate the penetration of composites in the passenger car market. At the same time, considering the steady increase in domestic construction machinery sales, the application of composite materials in this field is also expected to grow synchronously. We predict that the domestic composite market for passenger cars and engineering vehicles will have 12 billion and 8 billion market space respectively in 2030. As a domestic leader, the company is expected to benefit from the rapid growth of the market space.
Risk factors: domestic wind power installation dropped sharply; the price of glass fiber composite fluctuated greatly; the penetration speed of composite material in the automotive market was not as fast as expected.
Investment advice: benefit from the domestic rush to install the market, the company's wind power-related product sales increased significantly, making use of its advantages in the high-power market and offshore market, we believe that the company's wind power-related product performance has a strong stability.
At the same time, the automotive composite market is rapidly growing under the lightweight demand, and we are optimistic about the huge growth space of the company's revenue in the long term. We predict that the company's 2020-22 return net profit will be 343 million yuan, 307 million yuan per share, corresponding to 3.1Compact 2.77 plus 3.24 yuan per share. Considering the comparable company valuation (24 times in 2020) and the company's outstanding performance stability and future market space, we believe that the company's reasonable PE level in 2020 will be 28 times, corresponding to the target price of 86.8 yuan, and the first coverage will be given a "buy" rating.