The company is the leader of domestic crankshaft and is in the business cycle.
The company is a well-known engine crankshaft leading enterprise in China, and its products include core important components such as crankshaft, clutch, gear, forgings, etc., downstream mainly to automobiles, and extended to construction machinery, ships and other fields.
Excellent customer structure, including Mercedes-Benz, BMW, Volvo, Cummins, Yuchai, Sany, Hino, Yangma and other domestic and foreign giants. The past performance fluctuated with the downstream, and the company's revenue in the first three quarters of 2020 was 1.259 billion yuan (an increase of 17.54% over the same period last year), entering a new business cycle.
The industry barrier of crankshaft is high, and the market scale is 30 billion yuan / year.
Crankshaft is the core component of internal combustion engine, based on high technical requirements, low risk tolerance, long life cycle characteristics, high industry barriers. In 2020, the crankshaft market is about 30 billion yuan, of which commercial vehicle and passenger vehicle crankshaft market is in the level of 10 billion. In addition, heavy trucks and construction machinery are booming and growing rapidly.
The company ranks among the top three in the industry, with the advantages of internationalization and leading technology and equipment, the domestic crankshaft industry "tripod": Tianrun Industry, Fuda shares, Liaoning 518, each of which has its own characteristics. the company has a leading advantage in large ship crankshafts and passenger car crankshafts with high value. Based on the international strategy of business / talent / technology trinity, the leading advantages of process technology and equipment, expand precision forgings to reduce costs and increase income, constantly optimize customer structure, enter the high-end market, the company's share is expected to continue to increase.
Growth logic: commercial vehicles are growing steadily, luxury cars and non-roads are new growth highlights. 1) the renewal cycle continues, and the heavy truck market increases steadily. Elimination and renewal, capital construction plus, heavy trucks continued to boom in 2020-2022, and the demand for crankshafts increased steadily. 2) there is great potential for the outward relocation of crankshafts for luxury passenger cars. Passenger car crankshaft 10 billion market, luxury cars against the trend growth, mainframe factory crankshaft matching to outsourcing. The company has obvious competitive advantage, win BMW (crankshaft), Mercedes-Benz (blank) and other supply qualifications, continue to expand products, customers, growth is expected. 3) enter the large crankshaft by joint venture, and the quantity and price will rise. The company and the global crankshaft giant Alfen Germany jointly enter the high-value large crankshaft business (for ships, nuclear power, construction machinery, etc.), with synergistic gains in customers, technology, products and so on. The volume and price will rise in the future, and the growth is expected.
Earnings forecast, valuation and rating
It is estimated that the company's homing net profit from 2020 to 2022 will be 2.04x243,000,000 yuan, with a growth rate of 53.1% 18.9%, 32.2%, 0.34, 0.41 and 0.54, respectively, and the corresponding price-to-earnings ratio will be 17.1, 14.4, 10.9. The company's competitive advantage is obvious, the share is expected to increase, to expand luxury passenger cars and "neck" large crankshaft business to open up twice the growth space. Considering the comparable sector and the company's valuation, the coverage gives a "highly recommended" rating for the first time.
Risk tips: commercial vehicle market fluctuations, passenger car customer development, large crankshaft business is not up to expectations
