\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 77 Sinofibers Technology Co.Ltd(300777) )
Core view
Event: Sinofibers Technology Co.Ltd(300777) issued the announcement of signing major sales contracts. The contract amount of carbon fiber and carbon fiber fabric signed is RMB 2.169 billion, accounting for 556.94% of the company’s operating revenue in 2020, and the performance period is from 2022 to 2023. The company’s high-performance carbon fiber and fabric are well used in the high-end field of China’s aerospace and have high customer recognition. The signing of this contract will have a positive impact on the company’s performance.
Zt7 high-performance carbon fiber, high starting point competition: the domestic zt7 series (higher than T700 grade) carbon fiber products independently developed and produced by the company have broken the foreign blockade on aerospace grade carbon fiber technology and equipment, and have been stably applied in eight major fields of China’s aerospace. At present, sports and leisure account for the vast majority of carbon fiber applications in China. The company has high technical barriers and high starting point competitive advantages, targeting the aerospace field and civil medium and high-end market. At the same time, the R & D of high-strength T1000 and t1100 carbon fibers has been started since 2014, which is expected to break the monopoly of Toray in Japan and hexsell in the United States in this field.
The consumption of carbon fiber in advanced weapons has increased, and there is an urgent demand for domestic substitution: high-performance carbon fiber is an indispensable strategic emerging material for sophisticated weapons and equipment such as rockets, satellites, missiles, fighters and ships. Carbon fiber composites have irreplaceable performance in structural lightweight. The dosage of carbon fiber composites is more than 20% in the fourth generation fighters and 90% in UAVs. The international high-end carbon fiber market is still a monopoly pattern of Japan and the United States. China’s domestic carbon fiber self-sufficiency rate is less than 40% and has a high degree of external dependence. It has been subject to Europe, America, Japan and other countries for a long time. With the state vigorously supporting the application of high-performance carbon fiber in aerospace and other national defense fields, there will be strong demand in the field of national defense equipment.
The verification of the first raised investment “thousand ton line” has been completed, breaking through the capacity bottleneck: the company’s first raised investment project “1000 t / a domestic T700 Carbon fiber expansion project” has been converted to fixed assets in March 2020, and the product equivalence verification has been completed in September 2021. The “thousand ton line” can stably produce zt7 series, zt8 series and zt9 series high-performance carbon fibers in batches to meet the strategic needs of the aerospace field. At the same time, at the beginning of this year, the company started the fixed increase and raised 2 billion yuan for the project of high-performance carbon fiber and fabric products. After completion, it will have an annual production capacity of 1500 tons of 12K high-performance carbon fiber and fabric, or 400 tons of 3K products. The increase of production capacity has enhanced the company’s supply capacity and comprehensive competitiveness, and further consolidated the market position in the high-end field of aerospace.
The newly signed large order specifies the performance growth, and high barriers bring high profit margin level: the company’s revenue increased from 170 million yuan to 390 million yuan from 2017 to 2020, with CAGR of 31.1%; The net profit attributable to the parent company increased from 110 million yuan to 230 million yuan, with a CAGR of 28.2%. In July 2021, the sales contract of 640 million yuan was announced. This time, the sales contract of 2.17 billion yuan was announced, reaching 557% of the company’s total revenue in 2020. With the promotion of the construction of the company’s fund-raising projects, the production capacity has been greatly improved. Under the growing strong demand in the downstream, the inflection point of the company’s performance has reached. Under the high technical barrier of products, the company has a high profit margin, with a gross profit margin of 78.7% in the first three quarters of 2021, and has strong anti risk ability; In the future, the volume of income will expand and the scale effect will appear, which can effectively resist the impact of possible product price adjustment.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 261 / 480 / 750 million respectively, and the corresponding PE of the current stock price is 87 / 52 / 34 times. The company is a stable batch supplier of domestic zt7 series carbon fiber products, with high-end product positioning, benefiting from the large demand of downstream aerospace products and the acceleration of localization. Raised investment projects release capacity, and the inflection point of large-scale performance has reached. They are covered for the first time, and are rated as “overweight”.
Risk warning: the risk that the R & D of new products is less than expected; Risk of product price adjustment; The risk that the capacity release is less than expected; Risk of rising raw material prices.
