The core casting and forging business is stable, the capacity expansion releases the rising potential, and there is broad space for medium-and long-term growth.
The main results are as follows: (1) with more than ten years of deep ploughing in the field of large forgings, there is a significant advantage in the integration of industrial chain. The company is engaged in R & D, manufacturing and sales of large forgings and castings, and has formed a relatively complete manufacturing chain of "smelting / electroslag remelting, casting / forging / welding, heat treatment, machining, design and manufacture of large sets of equipment, painting". Among them, wind power spindle is the main product type of the company. In 2023, Q1 achieved revenue of 1.427 billion yuan, an increase of 5.98 percent over the same period last year, and a net profit of 86 million yuan, an increase of 65.28 percent over the same period last year.
(2) the forging capacity has been steadily expanded, and the newly raised investment project is expected to increase the forging capacity by 100000 tons. It is expected that when the "energy-saving and material-saving technology and equipment improvement project for core components of high-end equipment" is put into production by the end of the 24th, on the one hand, it will improve the production efficiency of the original wind power forging spindle and reduce consumables, on the other hand, it can also be used for the production of marine core components such as curved arms, diamond press hinged beams, and other forgings the company currently has a forgings capacity of 220,000-240,000 tons / year, and it is expected that the project will reach 320,000-340,000 tons / year after reaching production.
(3) the casting production capacity meets the order demand, and the new investment project focuses on product size upgrading. Due to the larger size of sea breeze structure, and considering the equipment level and transportation difficulty of the existing base, the company has invested in the construction of "large-scale offshore wind power products supporting capacity enhancement project" in Qingdao Baojian plant, which can upgrade the size of the company's existing onshore wind power structure products, sea breeze above 10MW or land wind structure above 6MW can be produced. After the project reaches production, it is expected to increase the production capacity of wind power structures, stator products and rotor products, each 300 sets, and casting processing products 270 sets.
(4) continuous research and development of die forging technology, quality improvement and cost control in parallel. The company actively develops die forging technology, which can greatly reduce the gross to net ratio of wind power spindle products compared with free forging technology, and overcome the shortcomings of large feeding, long manufacturing process, high energy consumption, high cost and long processing cycle at present. Material utilization and energy-saving benefits will be significantly improved compared with free forging technology. The downward trend of superimposed raw materials is obvious, and the company's profits are expected to be further repaired.
(5) the downstream customer resources are excellent, and the first-mover advantage builds a moat. The company's domestic and foreign customers include Yunda Wind Power, Shanghai Electric, Sany heavy Energy, Dongfang Electric, Nanjing Wind Power, China Shipbuilding heavy Industry, GE, Ende and other well-known manufacturers. At present, they have entered the supply chain of the top 15 machine factories in the world, and have been highly recognized by customers. with the steady growth of installed capacity in the future, the company's products will be able to advance steadily, rely on existing customer channel resources, increase market share, and broaden the category of wind power products. Realize the steady growth of wind power spindle revenue.
Investment suggestion: from 2023 to 2025, we expect the company to achieve a net profit of 460 million yuan, up 87%, 23%, 14%, and the current stock price corresponds to a PE of 22.5, 18.2 and 15.9 times. The demand for wind power installation is expected to pick up this year, especially the rapid growth of sea breeze installation, which will lead to the rapid growth of the company's wind power products, the decline of raw materials, and the expected repair of the company's profits. in addition, the company's product layout is complete, multi-business coordination is expected to improve the competitiveness of the company. Cover for the first time, giving a "buy" rating.
Risk tips: the development of the wind power industry is not as expected; market competition aggravates the risk; the price of major raw materials rises risk; capacity delivery schedule is not as expected; industry scale measurement deviation risk; reporting information lag risk and so on.