Core view: The company is a leading domestic industrial coatings company. The two major businesses of wind power and container coatings have a market share of more than 25%. Due to factors such as rising downstream shipping costs, elimination of used containers, and centralized delivery of downstream container ship orders, the growth rate of downstream container production is expected to nearly double in 24, and will remain high for 25-27 years. The company's current container paint price is relatively low, which is expected to repair and contribute to greater performance flexibility. At the same time, the company is actively expanding the blue ocean market for marine coatings, and there is huge room for domestic alternatives. The wind power paint business is growing steadily, and new tower paint businesses are being expanded. The company raised 70,000 tons of production expansion projects and continued to advance to meet downstream needs and undertake long-term development.
A leading industrial coating company, has been deeply involved in related sectors for more than 20 years. The company is a leading domestic industrial coating company. Its main business includes wind power blade coatings, container coatings, bridge and steel structure coatings, etc., and has a history of development for more than 20 years. In '23, the company's wind power coatings accounted for 45% of revenue, and container coatings accounted for 51%. The company's IPO project built a factory in Zhuhai to expand production capacity and consolidate its location advantage in South China. In the future, the company's production capacity will increase from 90,000 tons/year to 140,000 tons/year, opening up new growth space.
The downstream container recovery is strong, and the company's paint profit recovery is flexible. 1. Downstream shipping costs have soared, driving a strong recovery in container demand in 24 years. Currently, the industrial chain is full of orders, and the growth rate of container production is expected to reach 93% in 24; 2. Demand for the elimination of used containers will be concentrated in the next few years. Global container production is expected to reach 444/424/510/4.87 million TEU in 24-27, and medium- to long-term prosperity is guaranteed; 3. Container paint prices are currently relatively low, and there is plenty of room for upward repair. It is estimated that for every 1,000 yuan/ton increase, the corresponding annualized profit elasticity will reach 65 million yuan.
Wind power installations are growing steadily, expanding a new track for tower coatings. 1. According to GWEC forecasts, the new installed capacity of global wind power will increase from 117 GW to 171 GW from 2023 to 2027, with a compound annual growth rate of 9.7%, providing broad growth space for the wind power paint market; 2. According to estimates, the global wind power paint market is expected to reach 8.1 billion yuan in 2027, including 3.3 billion yuan for blade paint and 4.8 billion yuan for tower paint. The company has expanded a new track for tower paint in recent years to broaden the growth space.
Marine coatings unleash growth potential, and the large infrastructure sector continues to develop. Relying on container paint terminal customer resources, the company is expected to quickly enter the certification system for marine coatings in a new field. The global marine coatings market reached 5.3 billion US dollars in 2022, and there is a broad market space waiting for the company to open up. China is the largest country in the shipbuilding industry, and 83.64% of the domestic marine coatings market is occupied by foreign brands, and there is plenty of room for domestic replacement. The company's large infrastructure sector also continues to develop, and it is expected to further develop the bridge and steel structure coatings market.
Profit forecast: The downstream explosion of the company's container business benefits and is expected to reverse. The IPO fund-raising and production expansion project continues to advance to help the company grow, and there is huge long-term room for layout expansion in the shipping sector. The company's net profit due to mother in 2024-2026 is estimated to be 2.10, 2.54, and 323 million yuan. The corresponding PE is 19.2X, 15.8X, and 12.5X, respectively, maintaining a “buy” rating.