\u3000\u3 China Vanke Co.Ltd(000002) 111 Weihai Guangtai Airport Equipment Co.Ltd(002111) )
Weihai Guangtai Airport Equipment Co.Ltd(002111) has been deeply engaged in the field of high-end equipment for more than 30 years. Its business is divided into airport equipment, fire rescue equipment and military equipment. It provides aircraft tractors, passenger ferry vehicles, fire rescue vehicles and military UAVs. Its customers cover military customers such as airports, aviation companies, government fire rescue teams and the air force. At this stage, the company focuses on the development of six industrial sectors, including airport equipment, fire rescue equipment, military equipment, UAV equipment, mobile medical equipment and power electronic equipment. The company is a listed leader in the scarcity of airport equipment in China and the head of fire rescue vehicles. Its business industries are high barriers and deep moats, which require strict access qualifications. At the same time, the customer stickiness is strong and the growth space is broad.
The passenger volume of civil aviation is expected to grow rapidly, and the backlog demand of the epidemic is expected to be released
According to the civil aviation development plan of the 14th five year plan, the average annualized compound growth rate of civil aviation passenger volume in the next five years is 20.6%, significantly higher than the annualized compound growth rate of 11.00% from 2014 to 2019. The development of the industry has entered an accelerated period, and the demand for airport equipment configuration and renewal accumulated during the epidemic is expected to be released. From 2022 to 2023, the market space of China’s airport equipment was about 7-8 billion yuan. Weihai Guangtai Airport Equipment Co.Ltd(002111) is the leader in the listing of China’s scarce airport equipment. It has a deep moat, a wide range of products and a wide range of customers. In 2020, the revenue of airport equipment business was 1.497 billion yuan, a year-on-year increase of 17.14%. While leading the global wave of electrification, the company has entered the international market and the passenger boarding bridge market with high gross profit margin, and the growth ceiling has been further opened.
The fire rescue industry has high barriers, and the leading enterprises continue to grow steadily
The fire rescue industry has invisible certification access threshold. According to the China Fire Protection Association, at present, 36 fire equipment enterprises have obtained the highest AAA certification, among which there are few enterprises providing fire vehicles, mainly Zhongzhuo times ( Weihai Guangtai Airport Equipment Co.Ltd(002111) wholly-owned subsidiary), Hubei Jiangnan, graman international, etc. the industry pattern is stable. We estimate that the market scale of fire vehicles in China from 2022 to 2023 is about 13 billion yuan. Zhongzhuo times has a complete range of products, involving 18 series and more than 100 varieties. It is the first in the field of fire vehicle industry in North China. In 2020, the revenue of fire equipment will reach 1.107 billion yuan, a year-on-year increase of 45.09%, which is expected to maintain steady growth.
Military products are in hand, with sufficient orders and strong market demand
On July 1, 2021, the company announced that it signed six contracts with special customers, with a total amount of RMB 656 million, involving type 4 special products, accounting for 22.12% of the company’s revenue in 2020, which is the special business contract with the largest batch amount obtained by the company. On December 23, 2020, the Central Military Commission issued the military logistics regulations to reshape the military logistics system, straighten out the relationship between logistics support and improve the logistics work system. With the continuous upgrading of weapons and equipment, the continuous improvement of actual combat training level and level, and the continuous strengthening of logistics work, the demand for military support equipment continues to expand.
Military target aircraft benefit from the growing demand for military training and preparation, and the application scenarios of industrial UAVs are constantly enriched
The company’s military UAV business mainly relies on the wholly-owned subsidiary Quanhua times. Since joining Weihai Guangtai Airport Equipment Co.Ltd(002111) , in 2015, the company has made the strategic decision of “leading the people with the army”, successfully signed batch military orders, and the operating revenue has increased at an average rate of 30% per year. During the 14th Five Year Plan period, China’s national defense construction will usher in large-scale rapid growth and structural transformation and upgrading. The urgency of military training and war preparation is put on the agenda, and the demand for target aircraft developed by the company will increase accordingly. In terms of civil use, the UAVs developed by the company mainly involve fire fighting, public security, special police, aerial photography and other aspects. Relevant businesses will benefit from the large-scale development of civil UAVs in China and the continuous enrichment and proportion of industrial UAV application scenarios. On October 28, 2021, the company announced the establishment of a wholly-owned subsidiary Weihai Guangtai Airport Equipment Co.Ltd(002111) Aviation Industry Co., Ltd. in Weihai, which is mainly engaged in the research and development of military high-end large UAVs and industrial emergency fire rescue UAVs.
Withdraw large impairment such as goodwill and start again with light equipment
According to the announcement, Weihai Guangtai Airport Equipment Co.Ltd(002111) 2021 achieved an operating revenue of about 2.965-3.261 billion yuan, with a median of 3.113 billion yuan, an increase of about 5.00% year-on-year. In 2021, the net profit attributable to the parent company was 40-60 million yuan, with a median of 50 million yuan, a decrease of about 86.95% year-on-year. The main reason is that the company accrued goodwill of about 348 million yuan at the end of 2021 and offset some military products revenue. Excluding the provision for impairment and other factors, the net profit attributable to the parent company in 2021 is about 388408 million yuan, with a median value of 398 million yuan, and the compound growth rate from 2017 to 2021 is about 36.99%. The goodwill accrued this time is mainly formed by the previous acquisition of Shanying alarm and Quanhua times. After the accrual, the company’s goodwill is expected to be about 92 million yuan. In addition, the company accrued 51.08 million yuan of credit impairment loss in 2021q1-3, mainly due to the increase of accounts receivable and the bankruptcy reorganization of HNA related companies.
Investment suggestions:
Weihai Guangtai Airport Equipment Co.Ltd(002111) ploughs deep into the field of high-end equipment manufacturing. It is a listed leading enterprise with scarce airport equipment and a leader in fire rescue equipment. It has a high market share in China. It continues to expand new areas of layout, has a clear development planning direction and maintains a buy rating. We estimate that the operating revenue of the company from 2021 to 2023 will be 3.073 billion yuan, 3.673 billion yuan and 4.421 billion yuan respectively, the net profit attributable to the parent company will be 48 million yuan, 474 million yuan and 566 million yuan respectively, the EPS will be 09 million yuan, 89 million yuan and 1.06 yuan respectively, and the corresponding PE will be 104, 11 and 9 respectively.
