Introduction to this report:
The company is a leading specialty valve company. The bid rate for nuclear grade butterfly valves and nuclear grade ball valves is over 90%. Spent fuel post-treatment equipment opens up market space, and the hydrogen energy, military, and semiconductor layout is expected to open up a new growth curve.
Key points of investment:
Investment advice: The company's performance forecast is in line with expectations. Considering the decline in the overall prosperity of the metallurgical industry, the company's related business orders and revenue declined from the same period last year, reducing the 23-25 EPS to 0.50/0.67/0.89 (-0.16/-0.17/-0.19) yuan. Based on the comparable company's 2024 average PE valuation of 17.89x, the company was given a target price of 11.99 (-3.47) yuan for 2024, increasing its holdings.
The performance was in line with expectations. 1) As new nuclear power projects continue to increase, the company will fully benefit as the main supplier of nuclear power ball valves and butterfly valves. The increase in the company's nuclear power valve delivery volume in 2023 is one of the reasons for the increase in performance. 2) By strengthening budget management and implementing management measures such as increasing revenue and expenses, reducing costs and increasing efficiency, the company has improved operating efficiency and promoted the continuous growth of business performance. In 2023, we achieved 250 to 280 million yuan, an increase of 10% to 25% over the previous year; we achieved deductions of 218 to 247 million yuan, an increase of 10% to 25% over the previous year. Single Q4 achieved a return of 0.48 to 78 million yuan, a year-on-year increase of -2.04% to +59.2%, and a month-on-month increase of -36.8% to +2.63%.
Nuclear power projects continue to advance, and the nuclear power valve business continues to grow. According to the company's investor relations activity record table, the company's current annual production capacity of nuclear power valves can support the delivery of 6-8 valves needed to build new nuclear power units every year, and the total number of nuclear power valves of various types put into operation online has exceeded 150,000. According to the company's announcement, judging from the market share of nuclear power valves, the company is the main winning company for nuclear grade butterfly valves and nuclear grade ball valves. It has obtained more than 90% of orders for nuclear grade butterfly valves and nuclear grade ball valves for these nuclear power projects, and has achieved full localization of nuclear grade butterfly valves, ball valves and other products. The company has taken the lead in conquering the blue ocean market by investing in two phases to increase spent fuel post-processing equipment.
Catalysts: New nuclear power plants approved
Risk warning: raw material prices fluctuate, demand falls short of expectations, nuclear power construction falls short of expectations, etc.