Core views:
It is proposed to issue 750 million yuan of convertible bonds to speed up the construction of the Nantong Libert Heavy Industries project and enhance the company's assembly capacity. The company announced a convertible bond issuance plan. It plans to issue convertible bonds to unspecified targets. The total capital raised will not exceed RMB 750 million. The raised capital will be invested in the Nantong Libert Heavy Industries project, with a total investment of about RMB 1,295 billion. The company currently has two major production bases in Zhangjiagang and Zhanjiang, and the project plans to build a new production area in the Tongzhou Bay Demonstration Zone in Nantong City. It mainly manufactures and manufactures large-scale modules used in nuclear power engineering, petrochemicals, pharmaceutical electronics, marine engineering, mining machinery and other industries. On the one hand, the implementation of this project is conducive to solving the site restrictions of the original production base, making it easier for the company to undertake large-scale installation projects, and improving the manufacturing capacity of multiple modules simultaneously, thereby shortening the manufacturing cycle of large-scale installation projects and improving production efficiency; on the other hand, it is beneficial for the company to plan and coordinate the manufacture of different module projects, optimize the site layout, and further enhance the manufacturing and assembly capabilities of the company's industrial module design and manufacturing industry.
Recent orders have been placed intensively, supporting the continued rapid growth of the company's future revenue and performance. According to the company's official account, on January 14, 2024, the company signed the “7000 tons/year SOOC Project General Contract Agreement” and the “41,000 tons/year optical resin project construction general contract” with Zhejiang Tuoyuan Optical New Materials Co., Ltd., with a total contract amount of about 650 million yuan. Furthermore, the company recently won bids for various projects such as Lianhua Linde, Sinochem Blue Sky Honeywell, Covestro, Shadoma, UOP, Zhangjiagang Wacker, Quaker Chemical, Maoming Liquid & Air, and Meishan Yabao. Recently, the company has taken multiple orders to help support the rapid growth of the company's future revenue and performance. Furthermore, we determine that there are still full orders awaiting acceptance by the company for a long time.
Profit forecasting and investment advice. Under the rapid growth of orders in 2022, the company's performance in the past two years is expected to be gradually released. Furthermore, the company recently signed new orders at an accelerated pace. Therefore, we expect the company's net profit to continue to grow rapidly in 23-25 years, at 1.95/2.74 billion yuan, with continuous high performance growth. Referring to comparable company valuation levels (about 18.6 times PE in 24), the company was given a PE valuation of 19 times in 24, corresponding to a reasonable value of 11.61 yuan/share, maintaining a “buy” rating.
Risk warning: downstream demand is slowing; construction of the Nantong project falls short of expectations; insufficient financial strength.