Important hint: there are risks in the market, so investment should be cautious. In no event shall the information or opinions expressed in this report constitute investment advice to anyone. Investors should make their own investment decisions and bear their own investment risks.
The company is an internationally competitive supplier of dynamic oil film sliding bearings. Founded in 2003, the company has formed a diversified product model dominated by dynamic pressure oil film sliding bearings and supplemented by rolling bearings. it is a leading enterprise in the same industry with leading technical capability, complete product variety and high-end product application field. The company has three holding subsidiaries, and the actual control is Mr. Zhou Shaohua. From 2018 to 2022, the company's operating income grew at an average compound annual rate of 17.64%, and its mother's net profit grew at an average annual rate of 31.58%. In the first half of 2023, the company achieved operating income of 261 million yuan, an increase of 28.56% over the same period last year, and a net profit of 50 million yuan, an increase of 19.34% over the same period last year. The company aims to raise 530 million yuan, mainly to build high-precision sliding bearing high-efficiency production line and other projects.
The performance of high-end equipment improves the important basic parts, and the demand of downstream diversified market grows steadily. Because of its advantages of high rotational speed, excellent load carrying capacity, low friction coefficient, long application life and strong impact resistance, dynamic oil film sliding bearing can provide important support for the development of new industries of science and technology strategy in China. The demand for downstream energy power generation, industry-driven, petrochemical and shipbuilding is growing steadily, and the process of localization is expected to be accelerated. The market size of China's dynamic oil film sliding bearings is 3.23 billion yuan in 2020, and the compound growth rate of the domestic market is faster than that of the global market in 2020-2026, which is about 13%. By 2026, the Chinese market size is about 6.72 billion yuan.
The core technology has reached the international advanced level, and the products have been recognized by the industry's leading customers. From 2020 to 2022, the company's average R & D expenditure rate was 5.06%. A high-precision product design platform and technology experiment center were built, and 28 core technologies have been formed, 3 of which are at the international advanced level. The company has also participated in the global support of international well-known enterprises and has become a partner of leading customers in many industries, such as Siemens AG, Sulzer, GE and other enterprises. In the first half of 2021, China's market share is 6.21%, and the global market share is 1.59%.
Profit forecast and valuation recommendations: combining the two valuation methods of PE valuation and absolute valuation, we believe that the overall fair value range of the company's final 6-12-month forward is 34.86-4.067 billion yuan. The corresponding price-earnings ratio PE range of 2023 forecast homing net profit is 30.00-35.00x. The corresponding PE range of 2022 homing net profit is 38.35-44.74x, and the corresponding PE range of deducting non-homing net profit in 2022 is 44.41-51.81x. In the nearly one month to August 10, 2023, the static average price-to-earnings ratio of "general equipment manufacturing" (CSRC industry code: C34) in the "manufacturing" announced by China Securities Index Co., Ltd. was 32.75 times.
Risk hints: performance below profit forecast risk, technical personnel loss risk, key technology loss risk, actual controller improper control risk, accounts receivable and contract assets sending bad debt risk, inventory balance risk, main business gross profit margin decline risk, intellectual property risk, product quality risk, fund-raising investment project risk, creation risk, macroeconomic cycle fluctuation risk The risk of raw material price fluctuation, the risk that the performance is restricted by the market scale and volume, the decentralized competition pattern, and the lower-than-expected risk of R & D process and industrialization.