Key points of investment
Incident: Lianchuang Optoelectronics announced on August 5 that it plans to acquire 11% of Lianchuang Superconductor's shares with a total of 0.4906 billion yuan in cash, increasing Lianchuang Superconductor's shareholding ratio from 40% to 51%. After the acquisition is completed, Lianchuang Optoelectronics will become the controlling shareholder of Lianchuang Superconductor, and will include Lianchuang Superconductor in the scope of the consolidated statement. The acquisition was based on 80% of Lianchuang Superconductor's valuation of 5.575 billion yuan as the pricing basis for this transaction. At the same time, Electronics Group and Gongqingcheng Zhinojia each signed a “Profit Compensation Agreement” with the company and made performance promises: Lianchuang Superconductor achieved a cumulative net profit of not less than 0.6 billion yuan from 2024 to 2026.
The superconducting business is laid out in multiple fields, and new products are being released one after another: in 2023, the superconducting business subsidiary Lianchuang Superconductor achieved revenue of 75.398 million yuan and a net profit of 6.786 million yuan to mother. As a leading enterprise in the application of high-temperature superconducting technology in China, the company currently lays out high-temperature superconducting technology application products in various fields and has seen initial results: 1) Metal induction heating equipment: the company has completed the delivery of 10 units of equipment in 2023, and has now completed standardized product design. The energy efficiency ratio has exceeded 90%. The company's remaining orders will be scheduled in an orderly manner; 2) Magnetically controlled photovoltaic monocrystalline furnace superconducting magnets: The company has successfully developed related high-temperature superconducting magnet equipment. It has now completed the production and commissioning of two prototypes. Currently, it has completed the production and commissioning of two prototypes, and will currently exceed 300 units in 2024. Inside Delivery of at least 50 units; 3) High-temperature superconducting controllable nuclear fusion engineering equipment: In November 2023, Lianchuang Superconductor signed an agreement with CNNC to jointly build a controlled nuclear fusion project. The total project investment is expected to exceed 20 billion yuan. Lianchuang superconducting and core technicians continue to develop high-temperature superconducting magnets for fusion. They have now developed large D-shaped coils based on YBCO cluster cables, and have successfully passed low temperature tests in the liquid nitrogen temperature range.
The superconductivity business has sufficient orders in hand, and is expected to support the company's high performance growth in the future: Lianchuang Superconductor currently has a leading domestic high-temperature superconducting technology team and high-temperature superconducting magnet production technology, and currently has a mature product layout in the fields of metal thermal processing, photovoltaics, semiconductors and nuclear fusion. As of August 5, 2024, Lianchuang Superconductor has an order of 0.49 billion yuan, a framework agreement order amount of about 1.12 billion yuan, and the intended customer and order amount being tracked is estimated to be 81.5 million yuan. Currently, superconducting magnets for the company's induction heating equipment and magnetic-controlled photovoltaic monocrystalline furnaces are being delivered in an orderly manner, and superconducting magnet research and development for nuclear fusion engineering equipment continues to achieve technological breakthroughs, which is expected to contribute to a steady increase in the company's performance after merger.
Profit forecast and investment rating: The company's investment income is affected by weak downstream demand, and profit growth has slowed down this year. Based on this, we lowered our 2024-2026 net profit forecast to 0.45/0.58/0.7 billion yuan (previous values were 0.5/0.66/0.79 billion yuan, respectively), and the current stock price corresponds to PE 27/21/17 times, respectively. Considering that the company's laser and superconductivity business is growing at an accelerated stage, it is expected to accelerate its contribution to performance and maintain a “buy” rating.
Risk warning: The timing of revenue recognition in the laser sector is uncertain; traditional business divestment is less than expected risk; superconducting cooperation projects are affected by upstream strip supply and may affect product delivery progress; superconducting cooperation projects are not progressing as well as expected risk