Core viewpoints
Aviation parts processing and roller press double main industry leader. The company is mainly engaged in the business of roller press and has been a leader in the industry before listing. In 15 years, the company acquired a 100% stake in Dekun Airlines in cash and expanded its business to the field of aviation parts processing. Dekun was founded in 2008, mainly around Chengfei for sheet metal parts, process equipment, parts assembly and other links, is the most experienced and most comprehensive company in the field.
Dekun is the leader of private aircraft sheet metal parts, card parts assembly core track, benefit from the increase in the volume of models and production outsourcing, is expected to usher in a decade of development opportunities. Military aircraft is the leading force driving demand in the first half of the 14th five-year Plan, but with the delivery of domestic civil aircraft and the recovery of the international subcontract market, it will bring a broader space for the long-term demand for aviation parts. On this basis, benefiting from the continuous increase in the proportion of mainframe factory outsourced production, the parts processing market has a very significant low base and high growth effect. among them, the aircraft sheet metal and parts assembly market with low outsourcing proportion and good competitive pattern is the best. De Kun in the field of 1) military aircraft: covering almost all aspects of parts processing, and focusing on the development of sheet metal business, laying the foundation for the follow-up assembly business. The products are used in multi-type military aircraft, large transport aircraft, drones, missiles and so on. 2) Civil aircraft field: Cheng Feimin aircraft is the main production unit of domestic aircraft head, and Dekun is an important supplier of sheet metal and tooling parts. At present, Dekun provides supporting products for the airframe structure of large passengers, cargo aircraft and domestic regional aircraft (ARJ project), and undertakes the outsourcing processing of some of the main parts of C919.
The leading press industry, new products, afterloading market and mining business are expected to form a new growth point. The company's roller press business adopts the mode of first payment and then goods, with high bargaining power and excellent cash flow. The market in front of the roller press is cyclical, but the post-market demand is stable and the profit margin is as high as 61%, and the current concentration is relatively low. Chengdu Huanji, a new subsidiary of the company, was set up in 2020 to expand new products and afterloading markets in both directions, which is expected to form a new growth point of performance. At the same time, the company takes the lead in introducing the cement press into the mining field in China, mastering the technology and batch production capacity, which has a price advantage over foreign manufacturers, and is expected to gradually promote import substitution.
Financial forecasts and investment suggestions
It is expected that the company's 20-year, 21-year and 22-year EPS are 0.19,0.33,0.55 respectively, with a 21-year average valuation of 37 times, corresponding to the target price of 12.21,giving a "buy" rating for the first time.
Risk hint
The model order is lower than expected; the risk of decline in processing costs; the proportion of outsourcing is lower than expected