Weihai Guangtai's current bond conversion raised 700 million yuan. After deducting issuance fees, it will be used to supplement the emergency rescue and support equipment production base project (phase I), the Yangting base intelligent transformation project, and working capital. The listing date is November 10.
Leading domestic airport & fire rescue equipment company. Currently, the company mainly has two businesses: airport equipment (43% of revenue) and emergency rescue support equipment (53% of revenue). The rest of the equipment accounts for a relatively low share. Airport equipment has the ability to supply all ground support equipment for an airport, leading Asian airport equipment, and some products account for more than 50% of the domestic market. Downstream customers include the military, airports & aviation. In recent years, the company has actively expanded overseas markets, and its revenue share has gradually increased; in addition, the company's downstream customers include the military and emergency fire departments in various provinces and municipalities. It also has the capacity to produce mobile medical equipment. Since '21, the company's airport equipment business has been greatly affected by the epidemic, leading to a decline in revenue, and a decline in gross margin due to product structure. Combined with '21, when goodwill impairment was calculated, profits have declined significantly; various indicators such as operating capacity have also deteriorated.
The company is actively expanding overseas markets for airport equipment, while further expanding production capacity for other equipment, which is expected to achieve growth. Domestic airport equipment has been greatly affected by the epidemic in the past two years, and demand is expected to be released again in the future as the economy recovers; fire rescue equipment, on the other hand, is more rigid, and demand has maintained steady growth driven by demand for product upgrades. As a leading domestic airport & fire rescue equipment company, the company has clearly benefited from the recovery in domestic airport equipment demand. The contract amount signed in the first half of the year increased 50% year on year. At the same time, the company is also actively developing overseas markets. The contract amount for overseas airport equipment signed in the first half of the year increased 236% year on year; fire rescue equipment is expected to enter the peak procurement period in the second half of the year; at the same time, the company is actively expanding other equipment fields such as medical rescue equipment. In addition, the capital raised by the company's current debt conversion will be used to expand the production capacity of airport equipment, fire rescue equipment, and medical rescue equipment to provide support for the company's market expansion. According to Wind's unanimous expectations, the company's expected net profit for 23/24 is 300 million/352 million yuan, respectively, and the corresponding PE is 16.48X/14.63X, respectively.
The valuation is in a moderately low position since listing, stock price flexibility is good, and institutional attention is low. Judging from the valuation, the company's latest closing price corresponding to PE (TTM) is 22.1X, which is in a mid-low position since the past 5 years. The company's business is quite special, and there are relatively few comparable A-share companies. The current market value of the company's A shares is 5 billion yuan, and the stock price is quite flexible. There are only 2 institutions that report heavy stocks in the third quarter, and institutional attention is low.
Fair price protection is good, and debt base protection is average. The interest rate terms for the conversion of Guangtai bonds are higher than the market average, and the additional terms are fair. Based on the closing price of the corresponding company on November 8, the average bond conversion price is 98.83 yuan, and the parity protection is good; under this article, the net debt value is 83.52 yuan, YTM is 3.12%, and the debt base protection is average.
The expected listing price is between 125-130 yuan. Guangtai's conversion rate is AA-, the latest average price is 99.11 yuan. Comparable targets in the conversion include Ruichuang (latest closing price 141.37, conversion premium rate 15.69%) and Triangle (latest closing price 126.1 yuan, conversion premium rate 40%). It is expected that the conversion premium rate on the first day of the Guangtai convertible bond listing will be between 25-30%, and the listing price will be between 125-130 yuan. If the price is below 120 yuan, you can participate appropriately.
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