Benefiting from the domestic rush installation market, the company's sales of wind power-related products have 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 from a long-term point of view. Maintain the target price of 86.8 yuan (28 times PE in 2020) and maintain the "buy" rating.
Benefit from the rush installation of wind power, the performance increased significantly. The company realized operating income and net profit of 1.082 billion yuan and 286 million yuan respectively in the first three quarters, + 94.55% and + 135.98% respectively compared with the same period last year, and revenue of 541 million yuan and 161 million yuan and net profit of 161 million yuan respectively in the third quarter. We believe that the main reason for the sharp improvement in the company's performance is that the decline of wind power subsidies has promoted the wind power rush installation market, and as the first echelon wind power composite manufacturer in the industry, sales have been greatly boosted. At the same time, due to the advantages of product quality and large-scale production, the company's sales among core customers and Haifeng customers are also improving 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 with the advantages of high strength, high temperature resistance and corrosion resistance, and good processability. The life anxiety of new energy vehicles will also accelerate the penetration of composite materials 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 a market space of 12 billion yuan and 8 billion yuan 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 from a long-term point of view. We maintain the forecast of the company's 2020-22 return net profit of 3.43 yuan 3.07 / 360 million yuan, corresponding to the EPS of 3.1Maple 3.24 yuan per share, maintain the target price of 86.8 yuan (corresponding to 28 times PE in 2020), and maintain the "buy" rating.