Events:
The company issued a voluntary information disclosure announcement on the progress of the subsidiary turbine disk project.
Comments:
1. The military superalloy business has achieved a milestone, and the military business is expected to continue to expand. According to the announcement, the company's wholly-owned subsidiary "Shenshan Wanze Precision" recently received a letter from the relevant units. The domestic development project of the high-pressure turbine disk of a certain type of engine has reached the predetermined target. According to the progress of the project, the high-pressure turbine disk will enter the stage of small batch production, and the demand will be about 60 pieces in 2021. In order to ensure the delivery of the products in quality and quantity, Shenshan Wanze is required to do a good job in the production of high-pressure turbine disk hair embryos. This indicates that the precision superalloy parts of Shenshan Wanze have the industrialization ability and have been recognized by customers, which is of positive significance to the development of the company's superalloy business. We believe that at present, the domestic engine market is mainly military, and the important progress made in the domestic development project of high pressure turbine disk and entering the stage of small batch production marks a milestone in the company's superalloy military business. Military business will officially provide the company with large-scale revenue and profit contribution in 2021. At present, China's military aircraft is in the peak period of replacement, and there is a strong demand for domestic engines and domestic superalloys. It is expected that the localization of the company's high-pressure turbine disk will continue to release volume in the future, while other military projects are also expected to continue to fall to the ground. to contribute growth momentum to the company.
2. Military and civilian cooperation, superalloy business has entered the harvest period
The company is one of the private enterprises engaged in superalloys, which has rarely established a complete R & D system from master alloy, powder metallurgy to superalloy components. especially in the preparation of superalloy materials, precision casting blade preparation technology and technology has formed a more mature technical scheme, with the technical basis of large-scale mass production. In terms of civilian products market, the industrialization base of Shanghai Wanze Precision casting has achieved rapid development during the reporting period, and the production capacity of the first phase of superalloy project is expanding rapidly. The main customers downstream include China Aviation Development Corporation, CRRC Corporation, GE, Boma Technology, Addqual and other domestic and foreign industry well-known enterprises. In early 2020, information about the US embargo on Leap-1C engines began to ferment. Although the US government finally came forward to clarify the incident, it still forced the research and development of domestic engines to be accelerated. In addition to civil aero-engines, superalloys are also widely used in automotive engines, gas turbines and other fields, and there is a broad downstream space for superalloy civilian products market. In 2020, part of the company's civilian products business was affected by the epidemic, and some customers delayed the delivery of orders. it is expected that with the gradual fading of the impact of the epidemic in 2021, the company's civilian superalloys are also expected to achieve continuous breakthroughs. At that time, the company's superalloy business and the company's microecological preparation business will form a two-wheel drive development model, contributing to the company's continuous performance growth.
3. Continue to promote the equity incentive program to benefit the long-term development of the company.
On November 9, 2019, the company issued the "2019 employee Stock ownership Plan (draft)". The total number of employees participating in the current employee stock ownership plan is 7, with a total capital of 25 million. On December 22, 2020, the company announced the 2020 Equity incentive Plan (draft), which intends to grant a total of 12 million rights and interests to 4 senior executives and 225 core technical (business) backbone employees of the company. it consists of options and restricted equity. 1) options: 7.2 million stock options are granted and 800000 are reserved. The exercise price is 13.70 yuan per share; 2) restricted stock: 4 million restricted shares are granted at a price of 6.85 yuan per share. Options and restricted stock assessment requirements are the same, the assessment period is from 2021 to 2023, the assessment target is 21-23 relative to 2020 operating income and deduction of non-return net profit growth of not less than 12%, 25.44%, 40.49%. The amortization expenses for options and restricted stocks for 21-23 years are estimated to be 793.97 to 482.39 / 2.5761 million and 1208.65 to 630.77 / 2.9683 million respectively. We believe that the company's incentive plan has significantly improved in terms of coverage and implementation scale, which will help to establish and improve the company's long-term incentive and restraint mechanism, attract and retain talents, and mobilize the enthusiasm of the company's core team. it is good for the long-term development of the company.
4. Performance forecast:
We expect the company's performance from 2020 to 2022 to be 79 million, 228 million and 335 million respectively, with a corresponding valuation of 89, 31 and 21 times. Upgrade the rating, give the "highly recommended-A" rating.
Risk hint: the progress of superalloy research and development is lower than expected, and the industrialization process is slow.