Core ideas
Recently, the company disclosed an announcement regarding the signing of a major contract for daily operation. Weihai Development Fiber Co., Ltd., a wholly-owned subsidiary of Weihai Guangwei Composite Materials Co., Ltd., signed a “Material Purchase Contract” with customer A, with a total contract amount of 3663.6167 million yuan. The company's new T800 grade fiber has formed a series of products, including T800S/T800H/T800G grade. The application areas cover civil aviation, low-altitude economy, satellite Internet, etc., to help the company's long-term development. The company is a leading carbon fiber company. It covers a full range of aviation equipment, has signed a three-year contract, and is optimistic about medium- to long-term development space.
occurrences
Recently, the company disclosed an announcement regarding the signing of a major contract for daily operation. Weihai Development Fiber Co., Ltd., a wholly-owned subsidiary of Weihai Guangwei Composite Materials Co., Ltd., signed a “Material Purchase Contract” with customer A, with a total contract amount of 3663.6167 million yuan. The contract was executed over 3 years, with contract team 1 execution period of 2024.07.01 to 2024.12. 31, execution amount was 0.603 billion yuan, contract team 2 execution period was 2025.01.01-2025.12.31, execution amount was 1.187 billion yuan, contract group 3 execution period was 2026.01. 01 - 2026.12.31, execution amount was 1.874 billion yuan.
Brief review
A three-year contract of 3.66 billion yuan was signed to help the carbon fiber business develop rapidly
Weihai Development Fiber Co., Ltd., a wholly-owned subsidiary of Weihai Guangwei Composite Materials Co., Ltd., signed a “Material Purchase Contract” with Customer A. The total contract amount was 3663.6167 million yuan, which was executed over 3 years. The total amount of the contract signed this time accounted for 145.51% of the company's audited revenue in the most recent fiscal year. The execution of the contract will have a significant positive impact on the company's revenue and profits. Weihai has developed the necessary qualifications required for contract business. The company has attached importance to scientific and technological innovation and continuously strengthened investment in R&D over the years. The scientific research results and product reserves formed have provided a strong guarantee for the sustainable development of the company's related business. The company has the necessary production capacity and resource conditions to meet contract orders, can provide excellent products that meet technical requirements and stable quality, and has a good ability to fulfill contracts.
New models and new applications help long-term development
The company successfully developed high-strength, high-strength medium model, high-strength high-strength high-mode series. The product brands cover T300/T700/T800/T1000, M40J grade/M55J. The production process covers wet spray wet spinning and dry-jet wet spinning carbon fiber product systems and formed industrialization, making it the carbon fiber enterprise with the most complete variety and serialization of carbon fiber products in China.
The company's T800 grade fiber has formed a series of products, including T800S/T800H/T800G grade. T800S grade is mostly used in fields such as hydrogen energy, photovoltaics, carbon and winding, T800H grade is used in aviation, and grade T800G is mostly used in civil aviation. The T800S has been applied in batches. The T800H level project passed the inspection in 2023 and moved into batch production. This year, it will be reflected as a new standardized product one after another. In terms of large aircraft, the C919 is mainly T300 grade fiber, and the C929 will be mainly T800 grade. The company has product and technical preparations, and has specially developed T800G grade fiber, which has both the performance advantages of T800S grade and T800H grade products.
In terms of the low-altitude economy, carbon fiber is mainly used as a structural material for low-altitude aircraft, and has characteristics such as lightweighting and low cost. Currently, the company's customers include electric vertical take-off and landing aircraft, helicopters, drones, etc. The business involves various forms such as carbon fiber, carbon fiber fabrics, pre-impregnation, and composite parts, but it has not yet contributed to the business. In the field of low-altitude economy, the company has accumulated rich technical experience over 20 years. It has carried out extensive verification work in aerospace equipment applications, civil aviation, etc., and has a corresponding product system. In the future, as the industrialization process of the low-altitude economy accelerates, it is expected to bring new long-term development to the company.
In terms of satellite applications, the beginning of various satellite projects may bring new opportunities for high-strength high-mode carbon fiber series. The company's various high-strength high-mode carbon fiber products, including M40J grade/M55J grade, have gone through years of application verification and have achieved mass production and batch supply for satellite applications. In the future, as the layout of satellite internet-related constellations accelerates, it is expected to become an important growth engine for the company's performance.
The Baotou project was officially put into operation, and the product qualification rate was good
At present, the carbon fiber production line with an annual output of 4,000 tons in the first phase of the Guangwei Project in Inner Mongolia has completed all equipment installation, commissioning and trial production work. It has the conditions required for normal production and operation, and has been officially put into operation. The successful commissioning of the first phase of the Inner Mongolia Guangwei project is a further reflection of the company's promotion and implementation of the “two highs and one low” carbon fiber development strategy. It helps the company to give full play to the advantages of the entire carbon fiber industry chain, enhance the company's carbon fiber supply capacity and product capabilities, enrich the company's carbon fiber product system, and provide more cost-effective multi-level carbon fiber products for downstream applications to meet the individual needs of carbon fiber in various downstream application scenarios
Motivation assessment standards are optimized, and the indicators are both challenging and attainable
As the domestic civilian carbon fiber industry faces continuous intensification of competition and price pressure, the 1.34 billion yuan Baotou new carbon fiber production capacity project is about to be completed, and the first phase of the 4,000 ton annual production capacity plan is officially put into operation. The company reduced the trigger value for the equity incentive assessment on April 29, 2024. This plan adjustment can more objectively reflect the external environment and the company's business development prospects. The adjusted performance assessment indicators are both challenging and achievable, which is conducive to fully mobilizing employees' enthusiasm.
Profit forecast and investment rating: full range of aviation equipment coverage, 3-year contract signed, optimistic about medium- to long-term development space, and maintenance of purchase ratings
The company is expected to form a complete industrial chain from carbon fiber, fabric, resin, high-performance pre-impregnated materials to composite parts, components and finished products, supported by high-end equipment design and manufacturing technology, and further consolidate the company's leading position in the domestic carbon fiber industry on the basis of the current production and sales scale, laying the foundation for rapid development in the next five to ten years. The company's net profit from 24 to 26 is estimated to be 923, 10.27, and 1,329 million yuan, respectively, with year-on-year increases of 5.67%, 11.25%, and 29.44%, respectively. The corresponding EPS for 24 to 26 is 1.11/1.23/1.60 yuan, respectively. Corresponding to the current stock price PE is 33.55/30.16/23.30, respectively, maintaining a “buy” rating.
Risk Alerts
1. The risk of falling product sales prices. On the military side: the price of carbon fiber products produced in fixed batches has declined, while the price of the new business contract product has been further adjusted; the civilian product side: mainly affected by the price of raw materials and the relationship between supply and demand in the market, the sales price of the product will go on the market. Among them, the price of wind power carbon beam products is mainly negotiated between the company and the end customer.
2. Risks of new product development. The development of relevant models of products in high-end applications needs to go through various stages such as project establishment, program verification, engineering development, design and production finalization, and the cycle from development to sales is long. At the same time, the company's development of new products may also face competition with other domestic companies. If the company's new products fail to pass design approval or fail to achieve the expected results or goals in application verification, mass sales of new products cannot be achieved, which will adversely affect the company's future performance growth.
3. Risk of performance fluctuations. The company's military goods business accounts for a relatively large revenue, and will still occupy an important position in the company's business in the future. However, military purchase orders are unstable and unpredictable, delivery time distribution is uneven, and the annual execution rate of order contracts is uncertain.
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