The field of powder coating has been ploughed for many years, and the company takes the traditional business as the core, forming the business layout of "chemical new materials + high-end equipment manufacturing" two-wheel drive. The company's traditional main business is the R & D, production and sales of polyester resin series products and their raw materials for powder coatings. High-end equipment manufacturing business is mainly for aviation, aerospace and rail transit and other fields, products involving composite materials, carbon fiber products, metal parts and other categories.
The company's operating income has maintained steady growth in recent years, with an operating income of 2.079 billion yuan in 2019 and a net profit of 125 million yuan, which is 61.90% higher than that of the same period last year. In 2020, the company was under pressure under the influence of the epidemic. In the first three quarters, the company achieved an operating income of 1.222 billion yuan (- 18.91%) and a net profit of 55 million yuan (- 39.18%), mainly due to the impact of the epidemic on the delivery of the company's products.
The company benefits from the high economic cycle of the national defense industry, and the composite materials have the attribute of "simultaneous rise in quantity and price". According to the content of the 22nd meeting of the political Bureau, China will enter the stage of "leapfrog weapons and equipment development" + "strategy, subversive technological breakthrough". To sum up, we believe that the period of accelerated breakthroughs in China's national defense equipment and cutting-edge technology at the end of the 13th five-year Plan and the 14th five-year Plan is expected to enter a ten-year economic expansion period, and the leapfrog weaponry represented by military aircraft and missiles is expected to achieve additional layout.
Based on the lightweight and excellent physical and chemical properties of carbon fiber, its composites are widely used in aviation (Fmur35 wing, fuselage, etc.), missiles (intercontinental ballistic missile carbon nose cone), ground armor (structure / stealth armor) and so on. The company's existing compound material business has been large-scale, fund-raising projects to complete the company's product pedigree and industrial scale is expected to be greatly improved. The application of the company's composite products has been expanded to a certain military equipment field, supplying cabins for key equipment, and is in the process of mass production and delivery; at the same time, the company's composite parts production base fund-raising project is expected to realize the batch supply of vibration test-bed and composite cover body of Aerospace Science and Technology Group. To sum up, we believe that the company will fully benefit from the "14th five-year Plan" process of mass production of weapons and equipment, such as military aircraft and missiles, and the compound material business is expected to achieve rapid production.
The development of the satellite Internet industry is imminent, and enterprises are expected to fully benefit from the new infrastructure construction. SpaceX's Starlink broadband satellite Internet plan will initially launch 12000 satellites and place a large satellite constellation in space to provide high-speed Internet access to satellite receivers in every corner of the world, thereby solving the Internet access problem of 49% of the world's population. We estimate that one or two world-class satellite Internet enterprises may be born in China, and it may take eight years for 11000 of the US SpaceX (Starlink) construction plan to be put into orbit.
Composite materials have a wide application space in satellites. High-performance carbon fiber and its composite products occupy a leading position in the satellite structure products in orbit and in the stage of research and demonstration in China, and they are the core materials of all levels of primary and secondary structures. At present, the company has carbon fiber composite components such as satellite antennas, satellite support towers and satellite reflectors, and its downstream customers include core customers such as Aerospace Science and Technology Group 504, which has a strong customer base and first-mover advantages. We expect that the company's related composite products will fully benefit from the construction of new satellite Internet infrastructure, and the performance is expected to be greatly improved.
Rail transit leads the compound material increment market, and the company has obvious first-mover advantage with the rapid increase of railway operation mileage, creating a huge demand for EMU vehicles. According to the information disclosed in the company's 19 annual report, it is estimated that in 2025, the mileage of railway operation is expected to reach 38000 km, with 30,000 to 45,000 new EMUs, and the average annual demand for intercity EMUs in China in the future is 1000,1500. At the same time, the demand for urbanization vigorously promotes urban rail investment, and the amount of investment in this area is growing rapidly. Through the use of carbon fiber to realize the lightweight of rail transit vehicles, the running power and the impact between vehicles under acceleration and deceleration can be effectively reduced, and the energy can be greatly saved. at the same time, lightweight will also bring many advantages, such as reducing track wear, improving vehicle stability and safety, and so on.
At present, the honeycomb series composite products developed and produced by the company can effectively reduce the floor weight of 1xp3; according to the information disclosed in the company's 20-and-a-half annual report, the company has delivered the medium-speed maglev project of 200km/h of Tangshan locomotive and the 600km high-speed maglev project of Changchun bus. To sum up, we believe that the company's compound timber business may fully benefit from the upward cycle of the rail transit industry and lightweight demand, scheduling or achieving additional layout.
Profit forecast and rating: to sum up, in terms of high-end business, with the great-leap-forward development of weapons and equipment during the "14th five-year Plan", the corresponding compound material business is expected to achieve rapid growth; civil rail transit and satellite Internet composite business is expected to benefit from the high economic cycle of the industry. In terms of traditional business, benefiting from the promotion of environmental protection policy ("paint to powder" trend), the corresponding polyester resin business is expected to achieve additional layout. Under this assumption, the company's revenue from 2020 to 2022 is expected to be 1.877max 2104max 2.350 billion yuan, corresponding to the parent net profit 0.99pm 158max 2505m, EPS 0.12pm 0.190.25x, Pamp E 39.15kg 24.69max 18.97x. The company's revenue is estimated to be 2.350 billion yuan from 2020 to 2022, and the corresponding net profit from the corresponding parent is 0.9918,000,000 yuan and 0.190.25 yuan respectively. For the 2021 forecast PE of 36.19x, the company has a target price of 6.88 yuan, giving a "buy" rating for the first time.
Risk hints: the risk of market competition; the risk of price fluctuation of chemical raw materials; the risk of brain drain; the uncertainty caused by administrative approval and other factors in the promotion of new projects.
