\u3000\u3000 Anhui Truchum Advanced Materials And Technology Co.Ltd(002171) (002171)
Event: on January 21, 2022, the company issued a suggestive announcement on the listing and circulation of restricted shares. The number of shares lifted this time is 44819129, accounting for 3.3584% of the total share capital of the company. It is part of the shares with limited sales conditions for the company to issue shares, pay cash to purchase assets, raise supporting funds and related party transactions in 2018, The listing and circulation date of the restricted shares lifted this time is January 25, 2022.
Key investment points
The production of advanced basic materials continues to expand, and the market share of the company is expected to gradually increase. The company is the leader of China’s advanced copper based materials, with the market share ranking first in China in 2021. At present, the concentration of China’s copper sector and strip industry is low. The company actively expands production to promote industry integration, and various raised investment projects are advancing in an orderly manner. The market share is expected to increase gradually in the future, and the gross profit margin is expected to increase gradually with the increase of scale, so as to enhance the profitability of the business.
The high growth of new military materials is expected to continue to benefit from the high boom in missile, military aircraft and other fields. The company’s military new material business grew rapidly. The subsidiary Tianniao hi tech has strong strength in carbon fiber preforms. Its main products include special fiber shaped preforms, carbon fiber brake preforms, carbon fiber hot field preforms and carbon fiber cloth for aircraft manufacturing, which are widely used in aerospace and other fields. Among them, special fiber shaped preforms are applied to the throat lining and nozzle of solid rocket and missile engine, the nose cone and wing leading edge of special aircraft, and the company is expected to benefit from the batch production of new models such as solid rocket and missile; Brake prefabricated parts are batch matched with all models and series of military aircraft such as China’s high-performance transport aircraft, fighters and bombers, as well as civil aircraft such as domestic large aircraft. With the increase of aviation equipment, the company is facing greater growth space, and the field of high-speed rail and automobile carbon brake is expected to become incremental space in the future.
The subsidiary is preparing for listing, and the company’s valuation is expected to improve. Dingli technology, a subsidiary of Dingli technology, is a top material hot processing equipment enterprise in China. Its products cover special powder materials, carbon based and ceramic based composites and their manufacturing equipment. It is widely used in aerospace, automobile manufacturing and other fields, as well as the implementation of China’s large launch vehicle, space shuttle, aerospace aircraft, C919 aircraft and other projects, It provides a broad market demand for the application of high-performance composites. At present, it is preparing for spin off and listing. After listing, Dingli technology is still a holding subsidiary of the company and is still included in the scope of the company’s consolidated statements, which does not affect the company’s control over Dingli technology, and the company’s valuation is expected to be improved.
Profit forecast and investment rating: Based on the development prospects of the company’s military and civil businesses, we expect the net profit attributable to the parent company from 2021 to 2023 to be 581 / 754 / 903 million yuan respectively, with corresponding EPS of 0.44 yuan, 0.56 yuan and 0.68 yuan respectively, and corresponding PE of 25 / 19 / 16 times respectively. It is covered for the first time and given a “buy” rating.
Risk tips: 1) downstream demand and order fluctuation; 2) The company’s profit is less than expected; 3) Market systemic risk.
