Jiangxi Geto New Materials Corporation Limited(300986) (300986)
Global distribution of production capacity and rapid growth of revenue and profit. The company’s products are divided into two categories: Aluminum formwork and climbing frame, and the business model is mainly leasing. In 2020, the company’s aluminum formwork production capacity will be 2.2 million square meters and the output will be 2.1 million square meters. The production capacity layout will radiate all over the world. Benefiting from the increased penetration brought by the promotion of green buildings, the company’s revenue CAGR was 64% and profit CAGR was 60% from 2014 to 2020.
Green building drives the growth of the industry, and the concentration is expected to increase. Aluminum formwork is a green building material, which can reduce construction waste and carbon dioxide emission, and has strong policy support. Due to the fast construction cycle of aluminum formwork and no secondary plastering, the comprehensive cost performance is better than the traditional formwork. In 2020, the national aluminum formwork ownership will be 62 million square meters, the industry scale will be 36.4 billion yuan, and the penetration rate will be 20%. We predict that in 2025, the penetration rate of aluminum formwork will increase to 45%, the industry scale will increase to 70.3 billion yuan, and the five-year CAGR will be 14%. Aluminum formwork is a typical “big industry, small company”. With the difficulties of leading enterprises in the industry, the rise of raw material prices and the drag of downstream payment collection, aluminum formwork enterprises with small business scale will face greater competitive pressure, and the industry concentration is expected to increase.
Expand production to meet demand, research and development to enhance competitiveness. The company expands its production through self construction and franchise. With the improvement of production capacity layout and the increase of stock template, the cost advantage will be more obvious. As a leading enterprise in the industry, the company’s downstream customers are of high quality, the cash to cash ratio is greater than 1, and the operating net cash flow has changed from negative to positive. The company attaches importance to R & D and information system construction. R & D personnel account for 12.45% and R & D expense rate is 4.5%, which is in the forefront of the industry. The whole process information management improves the company’s template turnover rate and old board utilization rate. In 2020, the company’s template turnover rate is 26.46 times and the old template utilization rate is 67.67%. Accelerating the turnover rate is conducive to improving revenue and profitability.
Investment proposal and Valuation: it is estimated that the company will have EPS 1.5 from 2021 to 2023 58 / 2.29/3.06 yuan, corresponding to PE40 / 28 / 21 times. Aluminum formwork and prefabricated buildings are green building materials. We select Anhui Honglu Steel Construction(Group) Co.Ltd(002541) as a comparable company, give Jiangxi Geto New Materials Corporation Limited(300986) 38 times the target P / E ratio in 2022, the target price in the next 6-12 months is 87.02 yuan, and give a “buy” rating for the first time.
Risk factors: increased cost; Payment collection risk; Power shortage; The epidemic intensified.
