Chengdu Leejun Industrial Co.Ltd(002651) (002651)
It is mainly engaged in roller press and core parts of military aircraft. The compound growth rate of revenue in the past three years was 25% and 42% respectively
The company’s main business is cement roller powder equipment. It is the leader in China’s cement roller press industry. In recent two years, its products have entered the mine roller mill market, and multiple orders at home and abroad have been promoted simultaneously; Dekun aviation, a subsidiary, is the core supporting supplier of the aviation main engine factory. It has core technologies such as the overall component / UAV delivery of the aircraft manufacturing department and the manufacturing of large sheet metal parts, and takes the lead in entering the high-end link of the aviation manufacturing industry chain;
The company’s 2021h1 roller press business revenue is 319 million yuan (accounting for 59%), the net profit is 67.3 million yuan (accounting for 47%), the net interest rate is 21%, and the compound growth rate of revenue in recent three years is 25.1%; Dekun Airlines 2021h1 revenue is 215 million yuan (accounting for 41%), the net profit is 74.7 million yuan (accounting for 53%), the net interest rate is 35%, and the compound growth rate of revenue in recent three years is 42%.
Roller press business: the compound growth rate of revenue in the next three years is expected to be 22%
Benefiting from the demand of “efficiency improvement and emission reduction + equipment renewal” of Chinese cement plants and sufficient orders from many large mines at home and abroad, the compound growth rate of the company’s revenue in the next three years is expected to reach 22%.
The compound growth rate of Dekun airlines’ revenue in the next three / five years will be 62% and 30%, significantly faster than the growth rate of the industry
The subsidiary Dekun aviation is mainly engaged in aircraft parts manufacturing. It is one of the parts companies with the largest scale and the most complete product categories. On the basis of undertaking basic businesses such as machining and tooling, it has the ability to assemble large sheet metal parts and fourth generation fighter parts, and has a core competitive advantage;
As the only supplier of large sheet metal / fighter assembly (another Lihang Technology), the probability of new competitors entering the market in the next five years is low, and the company is the first to enter the terminal link of the parts manufacturing industry chain.
“Large volume of orders + increased outsourcing proportion of main engine manufacturers + increased types of delivered products”. The compound growth rate of Dekun airlines in the next three / five years will be 62% / 30% respectively, far exceeding the growth rate of aircraft parts industry by 21% and military aircraft by 13%; It is expected that the market share will accumulate to 7.5 billion yuan in the next five years, with large growth space.
Profit forecast and valuation
It is estimated that the net profit from 2021 to 2023 will be 275 / 424 / 596 million, with a growth rate of 43% / 54% / 40% respectively, a compound growth rate of 47%, pe46 / 30 / 21 times. It is covered for the first time and given a buy rating.
Risk statement
New competitors appear to seize the market share of Dekun Airlines; Dekun Airlines failed to successfully win the order of domestic large aircraft; The demand of the mine decreased, and the sales volume of high-pressure roller mill was lower than expected
