Summary content
The cold spray process for military aircraft is unique, solving the key problem of maintaining and extending the life of China's main air fighter aircraft.
Chaozhuo Aviation Technology has established a cold-spray additive manufacturing technology system to repair and remanufacture fatigue cracks in multi-model fighter landing gear girders. It is the only supplier for fatigue crack repair and remanufacturing of multi-type military aircraft landing gear frames at the overhaul plant under the China Air Force Equipment Ministry. It has added hundreds of thousands of flight hours to China's military units, and has an outstanding position in the military aircraft maintenance and longevity industry.
The total market space for cold-sprayed military aircraft maintenance will reach 2,813 billion yuan in the next five years. The market space for cold jet repair of US military aircraft reached $185 million in 2022. In 2022, the number of fighter jets of three or more generations in China is about 1/3 of that of the US. It is estimated that China's fighter jet cold spray market space is 386 million yuan. According to the neutral hypothesis, it is estimated that the growth rate of China's fighter jets is 18.94%, and the total theoretical space for the Chinese fighter cold spray market in 2022-2026 is 2,813 billion yuan.
The cold spray process has broad prospects for civilian use, and the potential for growth during the introduction period is huge. The cold spray process has been applied abroad in aviation, biomedicine, semiconductor power and energy fields. According to Grand View Research's market report, the global cold spray market space was US$987 million in 2020, and is expected to be US$1,213 million by 2026. China's cold spray technology is in the introduction period. Priority application is being applied in the aviation sector. Currently, it is being expanded to the civil sector. It is estimated that the total market space in 2022-2026 will reach 6.116 billion yuan.
Investment advice: We expect the company's revenue for 2022-2024 to be 1.48/2.68/332 million yuan, respectively, with a year-on-year growth rate of 4.5%/81.4%/24.1%; the estimated net profit of 2022-2024 is 0.60/103/132 million yuan respectively, with a year-on-year growth rate of -14.9%/71.1%/28.5% respectively; the corresponding EPS is 0.67/1.15/1.48 yuan, and the 2023.3.23 closing price corresponding to PE is 73.9X, 43.2X, respectively 33.6X
Considering the company's leading attributes and technical expandability in segmentation, the company was given 57 times PE in 2023, corresponding to the target price of 65.55 yuan/share, with initial coverage and a “buy” rating.
Risk warning: prohibited sale of imported raw materials; high customer concentration; declining gross margin; expansion falling short of expectations, etc.