Core viewpoints
Tieke track is backed by the National Railway Group, has the advantage of joint research and development with the Academy of Railway Sciences, and is the leader of domestic high-speed rail fasteners. In the next three years, the demand center of high-speed rail fasteners is expected to increase by 24.54% compared with 2022, and the company is expected to further increase its market share by virtue of its technological advantages. In the first half of 2023, the company won the bid for centralized supply, and its performance reached an all-time high; the amount of newly signed contracts increased significantly and contract liabilities increased, releasing a positive signal. Fund-raising project 9 million sets of fastener production capacity has been carried out trial production and CRCC product certification, long-term supply capacity has been increased to more than 3 times the current, providing a necessary prerequisite for the company's business development.
Summary:
1. Fastener of high-speed rail, driving into the fast lane of performance growth
Tieke track is backed by the National Railway Group and has the advantage of joint research and development with the Academy of Railway Sciences. it is a leading enterprise focusing on high-speed rail fasteners and focusing on the field of high-speed rail public works engineering. In the first half of 2023, the company won the bid for centralized supply of lines, making revenue and profits both achieve the best level in history; the total amount of newly signed contracts was 702 million yuan, an increase of 180.43% over the same period last year; and contract liabilities also increased significantly, sending a positive signal.
2. Track fasteners: high barrier, small and beautiful track, high-speed rail fastener market is expected to expand the track fastener is the key components of the track structure, which can prevent the vertical and horizontal movement of the rail, provide elasticity for the track structure and reduce vibration; among them, high-speed rail fasteners and heavy-duty fasteners are high-end products. The operating mileage of high-speed rail will increase by an average of about 2592.88 km per year from 2023 to 2025, and the demand for high-speed rail fasteners in the next three years is expected to increase by 24.54% compared with 2022.
Fastener system certification threshold is high, few participants, only 6-7 fastener system suppliers. For standard heavy-duty fasteners, the concentration of high-speed rail fasteners is further improved, and the share of Tieke track is gradually increasing compared with its competitors.
3. Joint research and development of key technologies, fund-raising, production expansion and growth
Most of the core technical personnel of the company have working experience in the Academy of Iron Sciences. Through joint research and development to participate in the R & D and improvement of high-speed rail and heavy-duty fasteners led by the Railway Construction of the Academy of Railway Sciences Group, the Railway Construction Institute of the Academy of Railway Sciences Group granted the company non-exclusive right to use high-speed rail fasteners free of charge, and its competitive strength is prominent. The company's core products are 100% self-produced, ploughing high-speed rail and heavy-duty fastener track, as of 2020H1 fastener products, the total proportion of high-speed rail and heavy load accounts for more than 90%, and the average price driven by product structure optimization has increased steadily. The company's IPO investment project to expand the production capacity of 9 million sets of fasteners, as of the first half of 2023 has carried out product trial production and CRCC product certification, long-term supply capacity has increased to more than 3 times of the current, providing a necessary prerequisite for the company's business expansion.
Investment suggestion: the company's revenue from 2023 to 2025 is expected to be 18.13,22.42 and 2.805 billion yuan respectively, and the net profit returned to the mother is 3.79,4.62 and 569 million yuan, + 60.13%, + 21.88% and + 23.09%, respectively. The corresponding dynamic PE from 2023 to 2025 is 19.95,16.37,13.30 times, respectively, and the "buy" rating is given for the first time.
Risk analysis: 1) the growth rate of railway and urban rail investment is declining faster than expected; 2) the core technology comes from the risk of non-exclusive authorization of the controlling shareholder; 3) the profit forecast assumption is not established risk; 4) the risk of subsidiary litigation.