Main points of investment

Next Tuesday (July 25), there will be a gem listed company "Power Transmission" inquiry.

Power Transmission (300904): the company's main business is wind power special reducer research and development, production and sales, the main products include wind power yaw reducer, wind power pitch reducer. From 2020 to 2022, the company achieved operating income of 497 million yuan / 639 million yuan / 619 million yuan, YOY of 438.21%, 28.72%, 3.17%, 88.60%, respectively, and realized net profit of 80 million yuan / 64 million yuan / 68 million yuan, YOY of 856.77%, 20.27%, 7.05%, and 101.37%, respectively. During the latest reporting period, 2023Q1 achieved an operating income of 96 million yuan, an increase of 87.50% over the same period last year, and a net profit of 4 million yuan, an increase of 273.06% over the same period last year. According to the preliminary forecast, the company is expected to achieve a net profit of 19.2147 million yuan to 24.052 million yuan from January to June 2023, a year-on-year change of 9.78% to 37.42%.

Investment highlights: 1, with the help of the real controller's rich experience in the development of reducers, as well as the advantage of early entry into the field of wind power, the company has become one of the core suppliers of special wind power reducers in China. Mr. Li Abo, one of the actual controllers of the company, has been engaged in the field of reducer for more than 40 years, and has been an employee of the Reducer Research Institute of Yinchuan Crane Machinery Factory, Deputy Secretary-General of the National Transmission parts Reducer Industry Association, and Director of the Design Office of Ningxia Reducer Research Institute. Under the leadership of the actual controller, the company chose to enter the field of wind power reducers with relatively high technical difficulties, and early entered the supply chain of domestic well-known wind power enterprises such as Xinjiang Goldwind Science & Technology and Dongfang Wind Power with stable product quality. and have developed Mingyang Intelligence, Sany Energy and other new customers. According to BNEF statistics, nine of the top 10 enterprises in China with new wind power hoisting capacity in 2022 (with a total market share of about 93%) have established business cooperation with the company, of which 8 have progressed to the stage of mass supply, and the market share of the company's wind power reducers has correspondingly increased from 5% in 2019 to 17% in 2021, ranking firmly in the top four domestic manufacturers. From the perspective of the industry, the proportion of wind power in the power production structure still has a large room for growth. According to the forecast of GWEC, the new installed capacity of wind power in the world will be 680GW from 2023 to 2027, and the average annual installed capacity of wind power will exceed 130GW. However, due to the high technical barriers, there are relatively few competitors in the wind power reducer industry and the competition pattern is relatively good, which may benefit the reducer manufacturers led by the company with corresponding first-mover advantages. 2. the company continues to develop and innovate, on the one hand, by enriching product models and driving the growth of related income, on the other hand, through the development of high-power wind power reducers, to further consolidate the company's position in the industry. During the reporting period, the company innovated and developed 63 new models of wind power reducer products; among them, the revenue of 12 new products launched in 2020 was 209 million yuan, that of 21 new products launched in 2021 was 221 million yuan, and that of 30 new products launched in 2022 was 427 million yuan. The number of new products is increasing, and the effect of innovation-driven performance growth is also significant. At the same time, in order to comply with the trend of technological development in the industry, the company is also committed to the R & D and innovation of high-power wind power reducers. The company is China's first 10MW offshore wind turbine, land-based single large megawatt wind turbine EN-220/10MW yaw reducer and pitch reducer supplier; in 2022, the company has begun to deliver corresponding high-power reducer products to prospective energy 14MW wind turbine and Oriental wind power 13MW wind turbine, forming a more obvious leading advantage in the field of high-power wind power transmission. 3. The company's fund-raising projects have been built ahead of schedule and partially consolidated, which is expected to alleviate the company's capacity bottleneck. The company's fund-raising project, "Precision Wind Power Reducer R & D and production Project", entered the construction period ahead of schedule in 2021; by the end of 2022, the book value of the relevant projects under construction was 249 million yuan, accounting for about 1% of the total amount of this investment project, of which 110 million yuan was consolidated ahead of schedule in the first quarter of 2023. From the perspective of the company's production capacity, the company's capacity utilization rate during the reporting period was 122.34%, 117.50% and 111.64% respectively, facing certain product delivery pressure. It is expected that the landing of the investment project is expected to alleviate the current capacity bottleneck faced by the company.

Comparison with listed companies in the same industry: comprehensively considering the comparability of the main business, select wind power parts companies such as New Qiang Lian, Riyue shares, and Jixin Technology as comparable companies. From the above comparable companies, the average revenue of comparable companies in 2022 is 3.093 billion yuan, comparable PE-TTM (arithmetic average) is 38.01X, and sales gross profit margin is 19.37%. Comparatively speaking, the company's revenue scale is not equal to the average of comparable companies, but the gross profit margin is in the middle and high range of the same industry.

Risk hint: companies that have started the inquiry process still have the possibility of not being listed due to special reasons, the company content is mainly based on prospectuses and other public materials, and the selection of listed companies in the same industry is not accurate. Risk, content data interception may have interpretation deviation and so on. The specific risks of listed companies are shown in the text.