Jiangsu Rainbow Heavy Industries Co.Ltd(002483) (002483)
1. Company introduction: Haifeng pile foundation is a leading enterprise with multi-point business
Jiangsu Rainbow Heavy Industries Co.Ltd(002483) its main businesses are high-end equipment business and environmental protection business, of which high-end equipment business includes all kinds of material handling equipment, ship supporting equipment and offshore wind power equipment; Environmental protection business mainly includes hazardous waste and medical waste treatment and disposal services and sludge treatment and disposal services.
The company's performance grew steadily and its profitability improved. In 2020, the operating revenue was RMB 3.61 billion, the CAGR was 25.2% in 2017-2020, the Q3 gross profit margin increased to 24.23% and the net profit margin increased to 9.58% in 2021, with a year-on-year increase of 3.7pct and 5.6pct respectively. The period expense rate has decreased significantly since 2019.
2. Recommendation logic: with the increase of product demand, overseas revenue is expected to increase
1) Guangzhou industrial control is about to take over and is expected to open the southern market. The actual controller of the company will soon become the Guangzhou Municipal People's government, which is expected to open the high-quality market in the South with the background of the actual controller.
2) During the "14th five year plan" period, Haifeng has broad development space and the company's pile foundation business has benefited. During the "14th five year plan" period, the annual installed capacity of wind power is expected to exceed 50gw, and the sea wind and wind resources are high-quality. At present, there are still subsidies and economy. We estimate that the demand for pile foundation during the "14th five year plan" period is about 50 billion.
3) The recovery of the ship market is good for the company's ship supporting equipment business. The hatch cover business of the company is closely related to the demand for new ships. At present, the margin of shipping problems is weakened, and the new shipbuilding orders are increased significantly in 2021. The ship supporting equipment business of the company is expected to benefit.
4) The environmental protection industry has a broad market space, and its subsidiaries are gradually making efforts. The company's active layout of the environmental protection industry is conducive to driving the rise of the company's overall comprehensive gross profit margin on the one hand, and enhancing the company's anti cyclicality as a heavy equipment enterprise on the other hand. The subsidiaries CNPC environmental protection and lvwei environmental protection have many obvious advantages in production capacity, technology, region and process, and have obvious competitiveness in the industry.
3. Profit forecast and investment suggestions
It is estimated that the company's operating revenue from 2021 to 2023 will be 4.128 billion, 5.116 billion and 6.260 billion respectively, and yoy will be 14.21%, 23.93% and 22.35%; The net profit attributable to the parent company is 354 million, 467 million and 598 million respectively, and yoy is 38.22%, 31.95% and 28.09%, corresponding to pe21x, 16x and 12x. We are optimistic about the company's core competitiveness, so we choose 29x in 2021 as the target valuation. The target market value is 10.4 billion yuan, with an increase space of 39.35%, and the corresponding target price is 11.01 yuan. It is covered for the first time and given a "buy" rating.
Risk warning: the risk that the construction progress of offshore wind power is less than expected, the risk of goodwill impairment, the risk that the hazardous waste operation license cannot be renewed after expiration, etc
