Zhejiang Tiantie Industry Co.Ltd(300587) (300587)
Urban rail noise pollution is brought into legal supervision, and there is a broad market demand for vibration and noise reduction. On December 24, 2021, the 32nd meeting of the Standing Committee of the 13th National People’s Congress adopted the law of the people’s Republic of China on the prevention and control of noise pollution, which will come into force on June 5, 2022. In the definition of transportation noise, the operation noise of Urban Rail Transit vehicles is added, and strict legal provisions are made on noise reduction and vibration reduction of rail transit. It is proposed that: 1) new construction, reconstruction For the expansion of Railways and urban rail transit lines passing through areas where noise sensitive buildings are concentrated, the construction unit shall set up sound barriers or take other measures to reduce vibration and noise in key sections that may cause noise pollution. If the construction unit violates the provisions of the preceding paragraph, the Department designated by the people’s government at or above the county level shall order it to formulate and implement a treatment plan. 2) Urban rail transit operation units and railway transport enterprises shall strengthen the maintenance of urban rail transit lines and urban rail transit vehicles, railway lines and railway rolling stock, and maintain the normal operation of vibration and noise reduction facilities. 3) Where serious pollution is caused by noise emitted from railway operation, railway transport enterprises and the people’s governments of cities divided into districts and counties shall investigate the noise pollution and formulate a comprehensive plan for the control of noise pollution. This legislation brings the noise control of urban rail transit into the supervision, and the control requirements cover the new construction, reconstruction and expansion and the operation of urban rail transit and railway lines. Vibration and noise reduction within the legislative provisions has become a mandatory requirement, which will promote all localities to give more consideration to noise pollution prevention and control and increase the application of vibration and noise reduction facilities in rail transit construction, operation and maintenance, In the future, the penetration rate of rail transit vibration and noise reduction facilities can be improved, and the industry demand space is broad, which is expected to maintain sustained growth.
The rail transit industry is growing rapidly, with outstanding competitive strength, and the market share can be expected to increase. As a leading enterprise in the field of rail transit vibration damping, the company has achieved a full range of rail transit vibration damping products. It has developed from a single type of rubber vibration damping product supplier to a comprehensive solution service provider in the field of rail transit vibration damping. With strong comprehensive strength and continuous improvement of product system, the company can provide products that meet the vibration damping needs of all levels. The project types cover urban rail transit, ordinary railway, high-speed railway There are many types of urban and suburban railways. The company’s performance increased rapidly. From 2016 to 2020, the net profit attributable to the parent company CAGR reached 29.13%, and the performance growth rate in the first three quarters of 2021 reached 143.65%. Since 2020, the company’s cash flow has improved significantly, there are abundant monetary funds, the company’s production capacity has doubled, and the production capacity expansion has been steadily promoted, which has helped to improve the company’s supply efficiency and continuously improve the vibration damping product system, so as to ensure the delivery of orders and the release of performance in the future. Since the beginning of 2021, the company has obtained a number of orders for major rail transit projects, with sufficient orders on hand to ensure the growth of its main business and increase its market share.
The multi-element layout has achieved remarkable results, the building vibration reduction and isolation is ready, and the lithium compounds inject growth power. Based on its main business, the company carries out diversified business expansion, actively arranges the building isolation business, carries out the R & D and production of building isolation rubber bearings, has strong advantages in raw materials and technology, and forms synergy with its main business. According to the announcement, At present, the company’s R & D and production capacity is 500 (1) The seismic isolation rubber bearing has passed the mechanical performance test. The design capacity of the production line project of building seismic isolation products raised by convertible bonds issued in 2020 is 7200 sets, which is expected to be put into operation in March 2022. It is expected to continue to benefit from the release of market demand after the implementation of relevant building seismic legislation and policies. Changgeely, a lithium chemical company, will become a wholly-owned subsidiary of the company in 2021. Changgeely will be realized in 2020 The revenue and net profit were 193 million yuan and 46.13 million yuan, with a total increase of 27.62% and 9.39% respectively. The operating cash flow performed well. The company plans to invest 1 billion yuan to build a lithium salt plant project, with a capacity of 30000 tons of anhydrous lithium chloride, 10000 tons of battery grade lithium carbonate, 10000 tons of battery grade lithium hydroxide and 10000 tons of chlorinated n-butane. The project is planned to be completed and put into operation on May 31, 2023. After the lithium salt project is expanded and put into operation, it is expected to further help the company’s overall performance thickening and valuation improvement.
Investment suggestion: we are optimistic about the future growth space of the company. It is expected that the company will realize operating revenue of RMB 1.990 billion, RMB 3.028 billion and RMB 4.235 billion respectively from 2021 to 2023, with a year-on-year increase of 61.12%, 52.14% and 39.85% respectively; The net profit attributable to the parent company was 349 million yuan, 559 million yuan and 779 million yuan respectively, with a year-on-year increase of 77.9%, 60.1% and 39.5% respectively; EPS is 0.56 yuan, 0.89 yuan and 1.24 yuan respectively, dynamic PE is 35.1 times, 21.9 times and 15.7 times respectively, and Pb is 5.9 times, 4.8 times and 3.9 times respectively. The company is a leader in the field of vibration and noise reduction of rail transit, with sufficient funds in hand, steady progress in product expansion projects, and the advantages of capital, products and production capacity contribute to the improvement of the company’s comprehensive competitive strength and market share. Under the background of the construction of China’s transportation power and metropolitan area, the demand for rail transit construction of new infrastructure will continue to be released. The implementation of noise control laws and regulations will help to improve the penetration of vibration and noise reduction facilities. There is a broad space for industry demand, and the company is expected to fully benefit. In addition, based on its main business, the company actively carried out diversified expansion, arranged new energy lithium chemicals and building isolation business, created new performance growth points, made smooth progress and achieved remarkable results, and formed positive synergy with its main business, which is expected to contribute to the improvement of valuation and performance thickening in the future, maintain the “Buy-A” rating, and the target price is 29.0 yuan.
Risk warning: macro economy fluctuates greatly; Policy promotion is less than expected; The construction of raised investment projects is less than expected; Lithium salt project construction is not advanced; Decline in fixed investment; The sale of products is less than expected; Loss of personnel; Decline in customers’ operating conditions; Risk of intensified industry competition; The epidemic situation is repeated.
