The company deeply ploughs the field of civil superalloy. The company's main products are cast superalloy, deformed superalloy, special alloy welding materials and so on. The company's products are widely used in petrochemical, chemical industry, new energy, marine, nuclear power, automobiles, moulds, core components of high-end manufacturing equipment and other fields. it occupies the leading level in the domestic industry in the market share of superalloy welding powder, welding wire, oil drilling and production and superalloy valves for high-end petrochemical equipment. In 2022, the company produced 4396.87 tons of superalloy materials and products, sold 5302.18 tons, and the production and sales rate reached 120.59%.

There is a strong demand in the traditional oil and gas field, and more blossoms in emerging fields.

1. The prosperity of the oil service industry has increased, and orders in the oil and gas field have increased. High oil prices have led to an increase in upstream capital spending on oil and gas, which is expected to grow 7 per cent year-on-year in 2023, according to IEA data. Petrochemical and chemical industry business accounts for a large proportion of the company's business, petrochemical, chemical industry new construction, transformation of large-scale projects continue to increase, supporting the company's demand for high-temperature corrosion-resistant alloys.

two。 The expansion of polysilicon production capacity will boost the development of the company's new energy products. Under the background of "double carbon", the rapid growth of photovoltaic installation will promote the continuous release of polysilicon production capacity. China's polysilicon production capacity is expected to reach 2.78 million tons in 2023, an increase of 156.22% over the same period last year. The company's main products in the field of polysilicon are cold hydrogenation devices, nickel-based pumps, superalloy pipes, etc., and the expansion of polysilicon production capacity promotes the development of the company's new energy products.

3. With the acceleration of nuclear power construction, nuclear power business is expected to reach a new level. The application scenarios of the company's products in nuclear power equipment mainly include valve, feed water pump, fuel rod hook claw welding and so on. During the 14th five-year Plan period, China will further accelerate the expansion of nuclear power installation scale, and the company's market development in the nuclear power field is expected to accelerate.

4. The marine engineering field has become an important starting point, promoting the optimization of product structure. In 2022, the added value of the offshore oil and gas industry was 272.4 billion yuan, an increase of 7.2 percent over the same period last year, and the output of offshore oil and gas increased by 6.3 percent and 10.2 percent respectively.

With the expansion of offshore oil and gas exploration and development to the deep sea, the manufacturing industry of deep-sea oil and gas production equipment will further develop, driving the demand for high temperature corrosion resistant alloys.

New projects continue to move forward and break through capacity bottlenecks. The "Special equipment Core parts Manufacturing Project" raised by IPO is expected to be put into production in the second half of 23 years, with an original planned production capacity of about 2550 tons, including 1050 tons of cast high temperature corrosion resistant special alloy products and 1500 tons of deformed high temperature corrosion resistant special alloy products. The company expects that after the project reaches production, it will bring an average annual business income of 543.16 million yuan and a net profit of about 54.31 million yuan.

In addition, the company plans to build 4500 tons of deformed high temperature corrosion resistant alloy products in the Dongtai base of Yancheng. With the continuous deployment of production capacity, the company's product delivery capacity will be significantly enhanced.

Investment suggestion: the company deeply ploughs the civil superalloy products, the downstream main application field oil and gas capital expenditure increases, the company product order is exuberant. In addition, the company's products are gradually expanding to new energy, nuclear power, marine engineering and other fields, and the product demand space is opened. With the production capacity of IPO investment project put into operation, the company's performance release is expected. We estimate that the company's homing net profit from 2023 to 2025 will be 1.131,148pm respectively, corresponding to the current price, the PE in 2023-2025 will be times that of 28-21-16, maintaining the "recommended" rating.

Risk hint: project less than expected risk, raw material price fluctuation risk, market competition risk and so on.