Jiangsu Liance Electromechanical Technology Co.Ltd(688113) (688113)
The company is a leading enterprise in the field of China Shipbuilding Industry Group Power Co.Ltd(600482) testing, and its main business is power test equipment and power test verification services. The company’s performance remained stable in the first three quarters of 2021, with a total revenue of 251 million yuan, a year-on-year increase of 3.67%; The net profit attributable to the parent company was 51 million yuan, a year-on-year increase of 20.80%; Net profit deducted from non parent company was 46 million yuan, with a year-on-year increase of 13.60%. The overall gross profit margin of the company was 38.35%, with a year-on-year increase of 2.27pct and a month on month decrease of 3.11pct; The company’s net interest rate was 20.23%, with a year-on-year increase of 2.87 PCT and a month on month decrease of 2.13 PCT. According to the company’s 2021 interim report, The revenue of intelligent test equipment accounted for 83.10% (YoY + 3.79pct), the revenue of test services accounted for 10.35% (YoY -6.14pct), and the revenue of spare parts and maintenance accounted for 6.55% (YoY + 2.35pct). According to the classification of downstream applications, the revenue of new energy vehicles accounted for 51.27% (YoY + 5.77pct) and the revenue of fuel vehicles accounted for 28.85% in the mid-2021 report period (YoY -3.53pct), ship revenue accounted for 11.14% (YoY -7.81pct), aviation revenue accounted for 5.57% (YoY + 3.34pct), and construction machinery and other revenue accounted for 3.19% (YoY + 2.25pct).
China’s only listed company in the field of aviation power test, and import substitution continues. In the aviation field, due to the characteristics of high speed, high power and difficult control of aeroengine, the hydraulic dynamometer required for its dynamic test is mainly mastered by foreign manufacturers. At present, due to the Sino US game, the cooperation between China and Kahn company of the United States is terminated, and the cooperation with Froude Hofmann company of the United Kingdom is also affected to a certain extent. Under this background, China’s Jiangsu Liance Electromechanical Technology Co.Ltd(688113) import substitution continues. In recent years, the company has maintained in-depth cooperation with China Aviation Development Group, made rapid progress in the research and development of aviation power test equipment and won a leading position in China. At present, the company’s hydraulic dynamometer products have been recognized by customers and obtained relevant orders from key units such as 5719, 331, 602, 606, 608 and 624. We estimate that the annual average procurement and maintenance market of military aviation power test in China is more than 1 billion yuan. According to the information of China Aviation Development bidding network, the total bid winning amount of the company’s hydraulic dynamometer in 2021 has reached 54.2557 million yuan. The company is at the starting point of the growth of aviation power test business, and is expected to replace imports to realize the rapid growth of aviation business in the future.
There is a strong demand in the power test field of new energy vehicles, and it is expected to speed up at the production end in the future. With the continuous improvement of the production and sales of new energy vehicles, the demand for power test in the R & D and production of new models is also gradually increasing. According to the market and markets, the growth rate of China’s automobile market and the penetration rate of new energy vehicles, the market scale of Shanxi Guoxin Energy Corporation Limited(600617) automobile test equipment will be about 1.36 billion yuan by 2025. At present, the field of medium Shanxi Guoxin Energy Corporation Limited(600617) vehicles is in a period of rapid development, and the demand for testing is mainly concentrated on the R & D end. The R & D and testing demand of many new models accounts for about 80% of the total testing demand of new energy vehicles, and the production end demand only accounts for about 20%; With reference to the fuel vehicle test equipment market, the demand at the production end accounts for 60%. In the future, with the further improvement of the output of new energy vehicles, the power test demand at the production end is expected to increase.
Profit forecast: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 80 million yuan, 90 million yuan and 105 million yuan respectively, and the EPS will be 126 million yuan, 141 million yuan and 165 yuan respectively, corresponding to the PE multiples of the current stock price of 54, 48 and 41 times. Considering the continuous growth of the company’s new energy business and the company’s high-speed development in the field of aviation power test, the company is given a 49-55 times PE valuation in 2022, with the corresponding price range of 69.09 yuan ~ 77.55 yuan. Give the company a “prudent recommendation” rating.
Risk tip: the expansion of new customers is less than expected, and the R & D and delivery of products are less than expected.
