Jiangyin Hengrun Heavy Industries Co.Ltd(603985) (603985)
Jiangyin Hengrun Heavy Industries Co.Ltd(603985) is a leading supplier of wind power tower flange. It expands its business to the wind power bearing and gear products downstream of ring forgings, opening the second growth curve. With the gradual increase of wind power installed scale, its performance is expected to grow rapidly in the future.
Key points supporting rating
Global wind power tower flange is an important supplier, and its performance has achieved continuous growth. Jiangyin Hengrun Heavy Industries Co.Ltd(603985) was established in July 2003 and is mainly engaged in the R & D, production and sales of rolled ring forgings, forged flanges and other free forgings. At present, the company's products include wind power flanges, gas turbine components, nuclear power components, pressure vessels, offshore oil and gas equipment, among which the income of wind power tower flanges accounted for 76.30% in 2020, which is the main source of income of the company. Benefiting from the high prospect of the wind power industry, the company's operating revenue increased from 741 million yuan to 2.385 billion yuan from 2017 to 2020, with a three-year compound growth rate of 47.66%; The net profit attributable to the parent company increased from 91 million yuan to 463 million yuan, with a three-year compound growth rate of 72.20%.
With the vigorous development of global wind power, offshore wind power has great potential. In recent years, the wind power industry has a strong development momentum. According to GWEC statistics, in 2020, the new installed capacity of global wind power reached 93.0gw, a year-on-year increase of 52.96%, and the cumulative installed capacity of global wind power reached 743gw, a year-on-year increase of 14.31%. China's wind power industry is developing rapidly. In 2020, the installed capacity of new wind power is 52gw, accounting for the first in the world, accounting for 56%. Under the background of the continuous increase of global carbon neutralization policy, the economy of wind power has been improved due to factors such as the large-scale of wind turbines, the decline of subsidies and the decline of wind abandonment rate. The demand for wind power is expected to maintain rapid growth. It is expected that the average annual installed capacity of wind power in China is expected to exceed 50gw during the 14th Five Year Plan period, with a compound growth rate of nearly 15%. Offshore wind power has obvious inherent advantages and great market development potential. According to the current plans issued by all provinces, it is conservatively expected that the new installed capacity of offshore wind power in China in the 14th five year plan will exceed 40gw.
The company's flange business is bound to major customers, positioned at the high end, developed the wind power bearing and gear business, and opened the second growth curve. The company has obtained the qualified supplier qualification of international and Chinese well-known manufacturers such as Vestas, general electric, Siemens COMESA, Alstom, Samsung heavy industry, Korea Chongshan, Xinjiang Goldwind Science And Technology Co.Ltd(002202) , Shanghai Electric Group Company Limited(601727) or entered its supplier directory. It is also one of the few enterprises in the world that can manufacture 7.0mw and above Shanghai wind power tower flange. At the same time, the company has mass produced 9mw offshore wind power tower flange. The company plans to raise funds through non-public offering, extend to forging downstream products, develop large-scale wind power bearing business, enrich the company's product varieties, and form the company's overall product scale and supporting advantages.
Valuation
It is estimated that the company's revenue from 2021 to 2023 will be RMB 2.557/37.17/4.868 billion, and the net profit will be RMB 516/6.47/935 million. Considering the leading position of the company in the field of tower flange and the growth brought by the future bearing business, with the gradual improvement of the installed scale of wind power, the future performance is expected to grow rapidly. It is covered for the first time and given a "buy" rating.
Main risks of rating
The installed capacity of wind power is less than expected; The verification progress of bearing products is less than expected; Industry competition intensifies
