\u3000\u3 Guocheng Mining Co.Ltd(000688) 239 Guizhou Aviation Technical Development Co.Ltd(688239) )
Deeply cultivate the field of aviation and Aerospace Forgings, and blossom at many points in the field of gas turbine and energy
The company specializes in the R & D, production and sales of ring forgings of difficult to deform metal materials for aviation. It has core technologies such as organization uniformity control of difficult to deform metal materials and formative integrated rolling of large and complex special-shaped rings. Its main products are ring forgings of aeroengines, as well as forgings for APU, aircraft nacelle and aircraft landing gear, Among them, the R & D and manufacturing technology of complex special-shaped rings such as large aeroengine casings has reached the international advanced level. At the same time, the company's products are also used in aerospace rocket engines, missiles, shipborne gas turbines, industrial gas turbines, nuclear power equipment and other high-end equipment fields.
Hangfa: consolidate the basic market of China's business and open up new growth space in foreign markets. 1) China: it has established long-term cooperative relations with the subordinate main engine manufacturers and scientific research institutes of AVIC, and is one of the main research and development units of domestic engine ring forgings. The products are applied to a total of 70 models of various domestic aeroengines in pre research, in research and in service, covering a new generation of domestic military aeroengines, Yangtze River series domestic commercial aeroengines, etc; 2) International: it has obtained the qualifications of major engine customer suppliers such as GE aviation, P & W, Safran, RR, Honeywell and Collins. It is a major supplier of global commercial engine casings and ring forgings in the Asia Pacific region. Benefiting from the large volume of new models in downstream China and the stable demand of international customers, the aviation business revenue CAGR in 20182021 was 42.27%. Aerospace: benefiting from the quantity of rockets and missiles, it is expected to usher in rapid growth. Aerospace Forgings of the company are mainly used in launch vehicle engines and missile equipment, including various cylindrical shells connecting various parts of aerospace equipment. Relying on the leading aerospace forging development level, the company has maintained stable cooperative relations with Aerospace Hi-Tech Holding Group Co.Ltd(000901) , aerospace science and industry group, and successfully entered the supply chain system of Chinese commercial aerospace enterprises such as blue arrow aerospace and star glory. Benefiting from the expansion of downstream market applications, the aerospace business revenue CAGR reached 75.85% in 20182021. It is expected that with the continuous increase of missile reserves and new demand during the 14th Five Year Plan period and the rapid development of China's aerospace industry, the company's aerospace forging business is expected to maintain the current high-speed growth trend.
The gas turbine energy sector has made concerted efforts, and the industry trend has boosted the boom of high demand. 1) Gas turbine: the company's products are mainly used in various types of Shipborne gas turbines and industrial gas turbines, including domestic advanced shipborne gas turbines and heavy-duty gas turbines. It is a supplier of gas turbine forgings such as AVIC, CSIC and Ge oil and gas. The CAGR of gas turbine forging business from 2018 to 2021 was 28.50%; 2) Energy: it mainly includes various bearing forgings of wind power equipment, various valve bodies, cylinders and flanges of nuclear power equipment, as well as electrolytic copper foil, the basic material for the production of lithium-ion batteries, and titanium rings / cathode rollers. Customers include Aerospace Hi-Tech Holding Group Co.Ltd(000901) , Dongfang Electric Corporation Limited(600875) , Timken, etc. The CAGR of energy forging business in 20182021 is 16.85%. It is expected that with the popularization of domestic marine gas turbines and the promotion of clean energy policy, the company's gas turbine and energy forging business is expected to usher in good development opportunities under the boom growth of relevant industries.
Raise funds, invest and expand production, undertake future needs, digital transformation and improve production efficiency. The company raised 349 million yuan, of which 269 million yuan was used for the "construction project of precision manufacturing industrial park of special alloy ring rolled forgings for aeroengines and gas turbines". It plans to improve the production capacity of small and medium-sized special alloy ring rolled forgings through the construction and purchase of advanced forging processing equipment in new production areas, so as to meet the growth demand of batch production of aeroengines and overseas long-term cooperation projects. In addition, the project will implement digital transformation, build flexible automatic production lines, build a full life cycle digital management platform, reduce labor costs, and effectively shorten the product design, R & D and manufacturing cycle to meet the differentiated and personalized product needs of downstream customers. We believe that raising investment and expanding production will help the company break through the bottleneck of production capacity, and the cost reduction and efficiency increase brought by digital transformation is expected to help the company continuously improve its profitability and enhance its long-term competitiveness.
Equity incentive is bound to the core backbone, and the performance is expected to enter the stage of steady improvement. From 2011 to 2016, the company implemented equity incentive to 13 management by transferring shares / capital contribution and introducing capital increase, laying a good foundation for later development. In 2022, an equity incentive plan was issued to grant a total of 2 million shares (1.43% of the total share capital) at the price of 25 yuan / share to 150 middle and senior managers and core technicians (34.25% of the total). The target value of performance assessment granted for the first time corresponds to the non net profit attributable to the parent company from 2022 to 2024, which is 161 million yuan, 201 million yuan and 248 million yuan respectively, and the CAGR from 2021 to 2024 is 25.97%. We believe that after the equity incentive of the company gradually covers the core personnel and completes the interest binding of the core backbone, the management and operation ability of the company will be significantly improved, and the performance end is expected to enter the stage of steady improvement.
Investment suggestion: the company is a core supplier in the field of China's aviation development and aviation forgings. Its products are matched with many new models of engines and aerospace special equipment for Chinese military and civil use. At the same time, it also supplies ring forgings to many international mainstream aviation development manufacturers. It is expected that the company will fully benefit from the upward trend of industry prosperity and the assembly demand brought by the mass production of key models in the future. We expect the net profit of the company from 2022 to 2024 to be 199 million yuan, 281 million yuan and 394 million yuan respectively, with corresponding valuations of 39, 28 and 20 times respectively. For the first time, a "Buy-A" rating is given.
Risk warning: military orders are less than expected; Civil goods orders were less than expected
