The roller press and its supporting business have strong market advantages, and the layout advantages of the military industrial chain appear. Lijun Co., Ltd. is the leader of the final grinding system of Chinese roller press and one of the drafters of the standard of Chinese roller press industry. Dekun Airlines, a wholly owned subsidiary, is a leading enterprise in the aviation parts machining industry, and its products are used in civil aircraft such as Boeing, Airbus, IAI, Comac, various types of military aircraft and carrier rockets, etc., completing the overall layout of the aviation parts machining industry chain (except composite materials) and in-depth cooperation with the domestic military aircraft main machinery factory manufacturing industry chain.
Market size: military products grow with the outbreak of the main war models, and domestic and foreign markets for civilian products are in full swing. Benefiting from the release of new models of military aircraft and the upgrading of old models, it is estimated that the new market demand for military aircraft and aviation parts industry is more than 200 billion, and the market demand for maintenance and renewal is nearly 100 billion, totaling more than 300 billion of the market size. At the same time, with the continuous construction of the "small core + big cooperation" model of military industrial groups in the future, the proportion of non-core outsourcing is expected to increase gradually, so that the market scale of spare parts production, machining, assembly and other enterprises will be further expanded. The civil market is affected by the "increase in the proportion of international subcontracts + the release of large domestic aircraft", which can contribute more than 180 billion of the market scale in the next decade. De Kun Airlines, as the leader of scarcity in the industry, is expected to have a market share of 30 billion yuan in the next 10 years, with huge room for growth.
Profit forecast: 1) good quality of the company: steady progress in double main industries + high economic development of military industry + production capacity is about to be greatly increased; (2) subsidiary Dekun Aviation has complete qualifications, complete chain and overall delivery capacity of spare parts. to undertake the processing and manufacturing business of multi-type aircraft and equipment at home and abroad. (3) the military aircraft market continues to benefit from the downstream volume, the domestic replacement and independent research and development of large aircraft in the civil aircraft market is just around the corner, and the future business demand growth has high certainty; (4) the company pays attention to sustainable kinetic energy, taking into account both new market expansion and existing market maintenance, with equal emphasis on capacity improvement and production efficiency, with sufficient driving force for long-term development.
The net profit of 2021-2023 is expected to be 368, 582, 819 million, PE27/17/12 times, with a buy rating.
Risk hint: the company's development is not as expected, the order is not as expected, and the company's R & D investment is not as expected.