The aviation industry is recovering at an accelerated pace, and the demand for airport equipment procurement is sufficient
By the end of May 2024, China's civil aviation industry had accelerated recovery and development, with a total transportation turnover of 58.23 billion tons/km, passenger traffic volume of 290 million passengers, and 3.427 million tons of cargo and mail traffic, with year-on-year increases of 35.2%, 26.5% and 30.3% respectively. Among them, the total turnover of international route transportation was 19.06 billion tons and kilometers, an increase of 90.9% over the previous year. With the accelerated recovery of international routes, airport equipment procurement projects were also released at an accelerated pace.
The fire equipment industry is accelerating intelligently, and applications such as robots and drones are developing at an accelerated pace
The fire emergency rescue equipment market continues to develop intelligently. In December 2023, the Ministry of Emergency Management and the Ministry of Industry and Information Technology issued the “Guiding Opinions on Accelerating the Development of Emergency Robots”. By 2025, a number of advanced emergency robots will be developed, greatly improving the level of science, specialization, refinement and intelligence. The “14th Five-Year Plan” emergency rescue force construction plan requires speeding up the implementation of the emergency rescue aviation system construction plan, completing key projects such as the introduction of imported large-scale fixed-wing fire extinguishing aircraft, the modification of large domestic fixed-wing aircraft, and the installation of large-scale drones, and speeding up the application of the low-altitude economy in the field of emergency rescue.
Leading the market share of airport equipment to accelerate overseas market expansion
The company has a complete range of airport equipment products. It is the only company in the world equipped with all ground support equipment capabilities for an airport. Some leading products have a domestic market share of more than 50%, and electrification equipment is being promoted to domestic and foreign markets at an accelerated pace. Overseas markets are expanding at an accelerated pace, and the share of overseas revenue increased from 1.34% in 2021 to 13.45% in 2023. The main reason is that the company's product performance, quality and technology have improved dramatically. Investment in R&D has continued to increase in recent years. Product performance has reached a relatively high level, and some products have reached the international advanced level. In 2023, the number of countries and regions the company's products and services grew from more than 70 to more than 90 at the beginning of the year. Relying on the superior channels and good reputation of overseas sales of airport equipment, it encouraged fire rescue equipment and mobile medical equipment to go overseas.
Profit forecasting
The company's revenue for 2024-2026 is 30.33, 37.07, and 4.489 billion yuan, respectively, and EPS is 0.58, 0.78, and 1.00 yuan, respectively. The current stock price is 17, 13, and 10 times PE, respectively. As the only company in the world that is equipped with all ground support equipment capabilities for an airport, the company has increased its market expansion efforts, strengthened sales and promotion with the three major airlines and the four major airports, and its market share has been rising steadily; keeping up with the needs of the national emergency rescue market, the newly developed large-capacity multi-rotor drone has completed many tests; and accelerated overseas market expansion. First coverage, giving a “buy” investment rating.
Risk warning
Domestic and foreign aviation industry development falls short of expectations; overseas layout development falls short of expectations; market competition intensifies, etc.