After 30 years of ups and downs, we have created a leading airport equipment company. The company was founded in 1991. After years of technology accumulation, the company has gradually expanded from prototyping innovation to independent innovation, from a single airport business to various fields such as airport equipment, airport maintenance and support, emergency rescue support equipment, drone equipment, etc., and has now formed two major businesses: airport equipment and emergency rescue equipment. It is the largest and world-renowned supplier of airport ground equipment in Asia. With the gradual recovery of the domestic aviation market, the company's operating conditions improved marginally. 24Q1's revenue increased 19.9% year on year to 568 million yuan, and net profit to mother increased 61.5% year on year to 49 million yuan. In recent years, the company has increased production capacity through fund-raising through convertible bonds, etc., and is expected to increase revenue by more than 1 billion yuan after the new plant is completed and put into operation.
Airport equipment: Domestic demand bottomed out and rebounded, electrification continued to advance overseas, and orders grew rapidly. The main function of airport equipment is to provide operational support and services. It is located at the end of the aviation industry chain and has high barriers. In recent years, domestic suppliers have gradually broken overseas monopolies. 1) On the domestic side, the recovery in the domestic civil aviation transportation market is compounded by trade-in related policy support, and capital expenditure or volume related to airport equipment may be achieved. From a medium- to long-term perspective, the number of domestic transport airports continues to rise, which may further open up the airport equipment market space. The company has a complete range of products and excellent after-sales service capabilities, which will fully benefit from the bottom up and rise in domestic demand. 2) Overseas, the global ground support equipment market space will be about 7.7 billion US dollars in 2023. In line with the electrification development trend of the industry, the company achieved “corner overtaking” in the field of electrification with domestic industry supporting advantages and years of technology research and development, and formed strategic cooperation with leading international customers such as TCR and Swissport. New overseas orders signed in 24Q1 increased by +419% to 287 million yuan compared to the same period last year.
Policies have been strengthened to promote the development of emergency rescue equipment, and mobile medical care has opened up new space for growth. Support policies for the fire industry have continued to be introduced in recent years, and the trillion dollar special treasury bond may boost the industry's prosperity. The company has strong competitive advantages in the field of fire rescue equipment and fire alarm equipment. The product categories are diverse, and it won the bid for the 375 million yuan fire engine project in May '24. The mobile healthcare sector is a potential sector for strategic cultivation. Recently, it has received multiple orders from domestic and foreign customers, opening up new space for growth.
The low-altitude economy industry has broad space, and the company can supply drones and ground equipment for general aviation airports, or fully benefit. The low-altitude economy is an iconic new type of productivity. Driven by multiple factors such as policies, it has a broad market space. The market size is expected to reach 2 trillion yuan by 2030. In the field of drones, the company targets the field of emergency rescue and supplies two types of civilian drone products: high-load long-time multi-rotor drones and tandem dual-rotor unmanned helicopters. Currently, the design has been finalized and is being continuously verified. In terms of ground equipment for general aviation airports, the company is experienced in the industry, and can use airport equipment translation for general aviation airport ground equipment.
Investment advice: We expect the company's net profit to be 3.09, 4.28, and 569 million yuan in 24-26, respectively, and the corresponding PE is 19.8/14.3/10.8 times, respectively. The company is a leading domestic airport equipment company. Under the wave of electrification, it has accelerated its overseas launch with its first-mover advantage, and is also expected to fully benefit from the acceleration of the low-altitude economy industry. First coverage with a “Highly Recommended” rating.
Risk warning: risk of macroeconomic fluctuations, overseas expansion falling short of expectations, increased risk of market competition