Main points of investment
The invisible champion of subdivision manufacturing industry with steady development: at present, the company's main business is the research and development, design, production and sales of steel structure and automobile wheels. The export business is less than expected by the epidemic, but the company adjusts its business layout in time, and the double main business drives the steady development. In the first half of the year, the operating income was 1.3092263 billion yuan, 3.27% of the same period last year, and the net profit of returning home was 38.9197 million yuan, down 9.06% from the same period last year.
The strong petrochemical steel structure is always strong.
Industrial steel structure is facing the east wind of policy. China's manufacturing industry continues to expand. The new construction area of prefabricated buildings in China was 418 million square meters in 2019, an increase of 45% over 2018. At present, there are sufficient orders for domestic petrochemical projects, and the total amount of investment in petrochemical projects along the southeast coast will reach 840 billion yuan in the next 3-4 years. According to the proportion of 3%, 5%, the market capacity of petrochemical steel structures in the company's coverage area is about 25.2 billion-42 billion.
Hengqiang, the strong player of Rishang Group: in the first half of 2020, the company's steel structure business continued to cultivate sub-sectors, with an operating income of 619.2 million yuan in the first half of the year, an increase of 3.49 percent over the same period last year. The company has strong qualifications, rich experience in large-scale projects, good market development environment, ISO9001 and other rich qualifications, the company's steel structure business is rising steadily.
Car wheels: huge room for growth in the medium term
Steel wheel industry: the leftover is king. In 2019, against the backdrop of the overall decline in the automotive industry, the company's automobile steel wheel business revenue reached 1.101 billion yuan, still an increase of 2.38% over the same period last year, and achieved a reverse trend; gross profit margin was 16.01%, also higher than last year.
Based on advanced technology, the company has sales channels all over the world, forming a good pattern of common development of OE market and AM market at home and abroad.
The company optimizes the layout and enters the aluminum wheel business: the company launches forged aluminum alloy wheels to meet the needs of the market for increasingly environmental protection and reducing emissions. The self-developed forged aluminum ring has passed the American SMITHERS, American STL and German TV test certification, and the customer feedback is good. At present, the first phase has been put into mass production. After the lightweight forged aluminum alloy wheel intelligent manufacturing project reaches production, the total annual production capacity of 1.5 million aluminum alloy wheels can be achieved. After reaching production, the annual sales revenue will exceed 1 billion yuan, and the annual net profit will exceed 100 million yuan.
Profit forecast and investment rating: the company's revenue from 2020 to 2022 is expected to be 3.14 billion yuan, 4.06 billion yuan and 5.3 billion yuan respectively, with year-on-year growth rates of 19.0%, 29.4% and 30.5%, respectively. The net profits attributed to the shareholders of the parent company were 110 million yuan, 180 million yuan and 260 million yuan respectively, with year-on-year growth rates of 37.9%, 56.6% and 44.6%, respectively, and the corresponding PE were 22.89,14.62,10.11 times respectively. Considering the steady development of domestic prefabricated buildings and green building steel structures, the company as a high-quality industrial steel structure manufacturer will benefit; automobile production and sales will continue to pick up, and the company's aluminum wheel project will gradually bring new revenue growth points. So for the first time, the company was covered, giving the company a "buy" rating.
Risk tips: macroeconomic policy changes; price fluctuations of major raw materials; impact of international markets on export business, exchange rate fluctuations
