Core viewpoints
The participating company Aerospace Technology held a meeting, and the industrial investment won a big order. January 14, the company announced that the company shares in the aerospace technology IPO application has passed. The main products of aerospace science and technology are aero-engine ring forgings, which are used in aerospace rocket engine / missile / shipborne gas turbine / industrial gas turbine / nuclear power equipment and other high-end equipment fields. Aerospace science and technology realized revenue / return net profit of 451mm in the first three quarters of 20 years. If YoY+9.2%/44.7%, is calculated according to 91.4xPE (TTM) on January 15 of the Defense military Industry (CITIC) index, the corresponding market value of aerospace technology is expected to reach 6.3 billion. Through Canyun Yingyi, the company holds 25.27% of the total shares before the issuance of aerospace technology. according to the minimum number of shares issued by aerospace technology, the proportion of shares held by the company will be diluted to 18.95% after the listing of aerospace technology, corresponding to a market capitalization of about 1.194 billion.
The proportion of non-housing construction increased, and PPP projects took orders cautiously. Taking into account the rush of infrastructure projects and the impact of the real estate "three red lines", we judge that 20Q4 continues to increase the proportion of non-housing construction projects, while non-housing construction projects have higher gross profit margin / better payback, which is expected to lead to increased profitability / continued improvement in cash flow.
Taking into account the increasing capacity of the company's traditional construction business to take orders, some non-housing construction projects can be switched from the PPP mode to the traditional construction mode, we judge that 20Q4 PPP project orders are still cautious. We estimate that at present, the company still has nearly 30 billion unfinished orders for the construction of the PPP project, and the performance growth is still guaranteed. In addition, with the gradual increase in the number of PPP projects entering the payback period, we estimate that the company's payback will be able to meet the investment expenditure demand from the beginning of 22 years, and PPP investment cash flow is expected to become positive.
Production capacity construction is advancing steadily, and the steel structure business is expected to grow rapidly. The company makes full use of the construction contracting capacity of the group to cooperate with the assembly business to promote the rapid development of the assembly business. The company's assembly business covers the whole industry chain of design / manufacturing procurement / construction installation / technical consultation, with strong overall bargaining power.
At present, the construction of 300000 tons of steel structure capacity in Xuancheng is progressing steadily and is expected to be put into production by the end of the 21st. It is estimated that the company's revenue from decoration and steel structure in 20-22 will be 14.0 YoY+50.8%/51.6%/56.3%.
Financial forecasts and investment suggestions
We expect the company to have a 20-22 EPS of 0.67, 0.79, and 0.93 yuan. The increase in the proportion of non-housing construction income leads to the improvement of profitability and the improvement of payback. The PPP project is expected to enter a balanced period of investment and income in 22 years, and the decoration and steel structure business is expected to grow rapidly. With reference to the average valuation of comparable companies, we approve the granting of 21-year 10XPE to the company, corresponding to the target price of 7.90 yuan, maintaining the "overweight" rating.
Risk hint: order conversion rate, steel structure business, held aerospace technology shares corresponding to the market capitalization is lower than expected.
