Report highlights:
The company's product, Jin Shuangqi, is currently one of the few clinical and OTC microbiocal probiotic drugs that span both clinical and OTC, and Ding Junsheng is the only active vaginal microbiococcal drug that treats gynecological infections in China. At the same time, it has launched probiotic health products such as “Today's Probiotics” and “Triple Probiotic Powder”. The company's product strength and brand strength are strong. In the post-pandemic era, probiotic products are effective products to enhance metabolism, and the market space for microbiologically active bacterial products in China is expected to reach 142.9 billion yuan in 2027.
Leading technology, layout of precision cast blades and powder turbine discs
As the only private enterprise in China capable of developing the whole process from R&D of high-temperature alloy materials to component preparation, the company has mastered the production technology of high-temperature master alloys, high-temperature alloy powders, and hot-end components such as precision casting blades and powder plates. In 2017-2022, revenue increased from 258 million yuan to 794 million yuan, a compound growth rate of 32.39%, and Guimu's net profit increased from 61 million to 102 million yuan, a compound growth rate of 13.53%.
The “two machines” project leads, and the superalloy business can be expected in the future
In order to break through the key technology of “two aircraft” and promote the development of aero engines and gas turbines, the market space for military aviation turbine blades and gas turbine blades reached 93.8 billion yuan and 26.5 billion yuan respectively. At the same time, the replacement of civil aviation is progressing, and the future demand cycle for superalloys for civil aviation will be long and growing steadily.
Technological transformation and base construction help seize market opportunities, and increased production capacity is expected to develop rapidly in terms of superalloys. In terms of high-temperature alloys, the Zhongnan Research Institute has a monocrystal/directional turbine blade production capacity of 10,000 pieces/year; the Shenzhen-Shantou Wanze monocrystal/isocrystalline production capacity reaches 10,000 pieces per year. On this basis, a technical improvement project for superalloys will be carried out to comprehensively increase the production capacity of superalloys. In terms of production capacity for microecological bacteria products, the construction of the biomedical R&D headquarters and industrialization base in Zhuhai will be accelerated, and it is planned to raise 900 million yuan for project construction through a fixed increase of 900 million yuan. The company's production capacity for superalloys and microbiologically active bacteria is expected to increase rapidly, and overall performance is expected to develop rapidly.
Investment advice and profit forecasting
The company's superalloy business lays out high-value products with precision casting blades. In the future, superalloys will develop by leaps and bounds in many fields. As the market space for the microecological bacteria business continues to expand and production capacity continues to be released, future performance is worth looking forward to. In 2023-2025, the company's net profit is estimated to be 272 million yuan, 433 million yuan, and 658 million yuan. EPS is 0.54 yuan, 0.86 yuan, and 1.31 yuan respectively. The corresponding PE is 30 times, 19 times, and 12 times, giving a “buy” investment rating.
Risk warning
Production capacity expansion falls short of anticipated risks; risk of declining gross margin of biobioactive bacteria products; development of the superalloy business falls short of anticipated risks.