[bl aviation eair Su mm material an ensemble ry] leading enterprise in China Ta. Under the aviation materials stock, there are titanium alloy precision casting division, rubber and sealing materials division, aircraft cockpit transparent parts division and superalloy melting and casting division.
The four major divisions are all from the Institute of Aeronautical Materials, which independently undertake the four major businesses of the company, and have been ploughing deeply for many years in their respective fields, with the advantage of first mover.
The prosperity of the aviation market continues to improve, promoting the growth of demand in the upstream materials industry. The aviation materials industry is the upstream of the aviation industry, and the two demands are closely related. The aviation materials market is driven by the downstream aviation market. 1) military aircraft: in terms of the number and intergenerational structure of China's military aircraft, there is still a huge space to be filled. Under the guidance of achieving the centenary goal of the founding of the army in 2027, the military aviation market will maintain a high demeanor. 2) Civil aircraft: according to the Comac Market Forecast Annual report (2022-2041), the global / Chinese aviation industry passenger turnover CAGR reached 3.90% in 2022-2041, the global / Chinese passenger volume will reach 47531 in 2041, and the civil aviation market demand is showing a steady growth trend. In addition, the domestic large aircraft C919 completed its first commercial flight in May 2023, achieving a breakthrough from 0 to 1, and the domestic civil aviation industry is expected to usher in a golden period of development.
The four major businesses have significant technical advantages and have core competitiveness. 1) Titanium alloy casting business: the main product is the intermediate casing, the military products cover most of the domestic military engine models, and the civilian products are the only units in China that can undertake the intermediate casing of the new generation LEAP engine. 2) Rubber and sealing materials business: the company has a rich technical reserve of rubber sealing materials, which fills many gaps in China, and many products are the only domestic suppliers. 3) transparent parts business: it undertakes almost all the research and production tasks of transparent parts for third-generation and fourth-generation fighters in China, and has obvious competitive advantages in the development of transparent parts for the front windshield of a new type of helicopter. 4) Superalloy master alloy business: it is the only batch production unit of high temperature master alloy for aero-engine under AVIC. The company undertakes the tasks of China's turbofan, turbojet, turboshaft and turboprop series of in-service engine models, covering all domestic batch of aero-engine superalloy master alloy products.
IPO raised investment and expanded production to ease the shortage of production capacity, and asset injection helped the development of the company. At present, the utilization rate of various business capacity of the company is maintained at a high level. The company was successfully listed and issued in Science and Technology Innovation Board in July 2023, raising a total of 7.11 billion yuan. The company's IPO raised funds for capacity expansion in four major sectors, boosting business growth. In addition, according to the prospectus, Zhenjiang Titanium Alloy Company plans to inject aviation materials shares, which is mainly responsible for providing outsourcing processing services for the company's titanium alloy casting business. Asset injection will further improve the production and processing capacity of titanium alloy castings.
Investment suggestion: we estimate that the company's operating income from 2023 to 2025 will be RMB 2.887 million, with net profit of RMB 5.94 million, net profit of RMB 5.94 million, corresponding to EPS of RMB 1.32, RMB 1.81, and a "Buy" rating for PE47.13/34.30/26.40X for the first time.
Risk hint: demand is declining, capacity construction is not as expected, performance and valuation judgment is not as expected.