\u3000\u3 China Vanke Co.Ltd(000002) 917 Shenzhen King Explorer Science And Technology Corporation(002917) )
Key points
Event: the company announced that the holding subsidiary Shandong shengshida signed the asset purchase agreement with Yinguang technology on March 6, 2022 and planned to use its own funds of RMB 71 million to purchase the 50 million detonator production line and related assets owned by Yinguang technology in Fei County, Shandong Province. At the same time of the transfer of the underlying assets, the production license capacity of 50 million detonators under the name of Yinguang technology will also be transferred to Shandong shengshida. The transaction price will be paid in two installments of 49.7 million yuan (including the deposit of 5 million yuan) and 21.3 million yuan respectively according to the transaction progress.
The production capacity of industrial detonators will be increased to 217 million, fully benefiting from the rise of the electronic detonator Market: this acquisition will effectively improve the production capacity of the company's industrial detonators. In December 2021, Shandong shengshida won the control of Taishan civil explosion in the auction, becoming the enterprise with the highest detonator production capacity in Shandong Province. The industrial detonator production capacity of Shenzhen King Explorer Science And Technology Corporation(002917) was also increased from 72 million to 167 million. This acquisition will further increase the company's industrial detonator production capacity to 217 million. According to the "14th five year plan" of the civil explosive industry, the production shall be stopped before the end of June 2022 and the sales of industrial detonators other than industrial digital electronic detonators shall be stopped before the end of August 2022. Policy driven and high unit price, the market potential of electronic detonators is huge. The company plans to comprehensively upgrade the ordinary detonator production line to the electronic detonator production line according to the industry replacement policy, and the relevant work is advancing in an orderly manner. The new production capacity of electronic detonators is expected to be gradually put into operation in the second half of 2022, thickening the company's performance.
Intelligent equipment for civil explosives: fully benefit from the upgrading of Intelligent Manufacturing in the 14th five year plan, cut into the field of military industry and open the upper limit of growth: the 14th five year plan for civil explosives industry further emphasizes less (no) humanization, automation and intelligence of production. As the leader of civil explosive intelligent equipment, the company will fully benefit from the equipment upgrading needs of downstream manufacturers. The company also copied and expanded the advantages in the field of civil explosive intelligent equipment to other fields, such as winery, packaging industry, etc. In addition, the company obtained the purchase order of military destruction equipment, and the gunpowder screening system has completed the functional test, opening the growth limit.
Civil explosive products: layout civil explosive integration to create the second pole of performance growth: the company promotes the civil explosive integration layout through M & A, empowers the M & a target based on the advantages in the equipment field, and aims to enter the top ten in the industry. At present, the company has an annual production capacity of 111000 tons of industrial explosives. After the acquisition, the annual production capacity of industrial detonators will reach 217 million rounds. With a fixed increase of 696 million yuan raised at the beginning of the year, the company's blasting service capacity, detonating equipment production line and management efficiency will be further improved. In the follow-up, with the production capacity launch of electronic detonators, the performance growth of the company is worth looking forward to.
Profit forecast, valuation and rating: we maintain the company's expected net profit attributable to the parent company from 2021 to 2023 of 51, 175 and 338 million yuan, corresponding to EPS of 0.19, 0.50 and 0.97 yuan Shenzhen King Explorer Science And Technology Corporation(002917) has a leading market position in the field of civil explosive intelligent equipment, and the military intelligent equipment business is expected to help the company break the growth ceiling. At the same time, the company cuts into the production field of downstream civil explosive products through extended M & A, and the new production capacity of electronic detonators is expected to be put into the market in 2022. Therefore, we maintain the "buy" rating of the company.
Risk warning: industrial chain extension and expansion risk; Price fluctuation risk of raw materials; Risk of delaying the production progress of electronic detonator production line; The risk that the development of military industry market fails to meet the expectation; Risk of acquisition not progressing as expected.
