\u3000\u3 Guocheng Mining Co.Ltd(000688) 777 Zhejiang Supcon Technology Co.Ltd(688777) )
Key points of the report:
The automation control leader of process industry has been widely recognized by customers at home and abroad
The company is committed to meeting the needs of "industry 3.0 + industry 4.0" of process industry enterprises, providing technologies and products with automatic control system as the core and covering industrial software, automatic instruments and operation and maintenance services, forming intelligent manufacturing solutions with industry characteristics, enabling users to improve the level of automation, digitization and intelligence, and realize efficient automatic production and intelligent management of industrial enterprises. Since 2011, the company has ranked first in the market share of DCS industry in China for ten consecutive years, and has been widely recognized by well-known enterprises at home and abroad, such as China Petroleum & Chemical Corporation(600028) , China Oilfield Services Limited(601808) , Petrochina Company Limited(601857) , CNNC and Saudi Aramco. From 2017 to 2021, the compound growth rate of the company's operating revenue was 27.41%, and the compound growth rate of net profit attributable to the parent company was 37.12%.
There is a huge market space for automation control in process industry, and import substitution is expected to accelerate
According to the data of reportlinker, the global DCS market scale is expected to be about US $16.9 billion in 2020, of which the process industry accounts for more than 60%. From 2020 to 2027, the global market CAGR is about 3.5%, and the market scale is expected to reach US $21.5 billion in 2027. According to the data of Rui industry, in 2019, China's DCS market was about 8.74 billion yuan, with a year-on-year increase of 7.2%; From 2022 to 2027, China's DCS market will maintain stable growth and CAGR will remain at 5-6%. DCS is the core of the process industry. Chinese manufacturers represented by the company have been able to meet the needs of Chinese enterprises, and import substitution is expected to accelerate.
Develop industrial software, enter intelligent manufacturing and open up long-term growth space
With the increasing improvement of the company's automatic control system product system, the company actively expands the field of intelligent manufacturing. While upgrading the existing advantageous products such as DCS, SIS and networked hybrid control system, the company focuses on the development of intelligent industrial software system, carries out customized research and development for the pain points of process industry, and improves its competitive strength in the field of industrial control automation and the high-end market of industrial software. In addition, the company also established a marketing service network centered on enterprises in the park, arranged offline 5S stores around the National Chemical Park, and built plantmate online platform to understand customer pain points, collect needs, and accurately analyze market and competition trends.
Profit forecast and investment suggestions
The company is committed to meeting the needs of "industry 3.0 + industry 4.0" of process industry enterprises. It has grown into an overall solution provider of intelligent manufacturing with broad growth space. It is predicted that the company's operating revenue from 2021 to 2023 will be 4.519, 5.890 and 7.347 billion yuan, the net profit attributable to the parent company will be 578, 737 and 941 million yuan, the EPS will be 1.16, 1.48 and 1.89 yuan / share, and the corresponding PE will be 62.76, 49.20 and 38.52 times. At present, the company is in the stage of rapid development, with more market opportunities, more inputs and low net profit margin. PS valuation method is more appropriate. Since listing, the company's PS has mainly operated in the range of 8-20 times, maintaining the target PS of 9 times in 2022, and the target price is 106.69 yuan. Maintain the "buy" rating.
Risk tips
Covid-19 recurrent pneumonia; The promotion of industry 4.0 business is less than expected; Risk of core parts supply; Demand fluctuation of downstream industries such as chemical industry and petrochemical industry; Overseas market expansion progress is lower than expected.
