\u3000\u3 Shengda Resources Co.Ltd(000603) 308 Anhui Yingliu Electromechanical Co.Ltd(603308) )
Investment logic
The “two aircraft” track is booming, and the company’s “two aircraft” (aeroengine and gas turbine) business is expected to continue to grow at a high rate. The company has continuously invested in the field of “two engines” since 2015. The company’s “two engines” business includes aircraft engine superalloy blades and casings, Shaanxi Aerospace Power Hi-Tech Co.Ltd(600343) superalloy structural parts, gas turbine moving blades, stationary blades, nozzle rings and other superalloy hot end components; At present, the company has entered the supply system of well-known customers such as GE, Siemens, Honeywell, China aviation development, China reburning and so on; Since 2018, the company’s two aircraft business has entered a high growth stage. From 2017 to 2020, the compound growth rate of the company’s “two aircraft” business revenue was about 89.7%. During the 14th Five Year Plan period, China’s aerospace industry has strong demand, and the company will still benefit deeply; We expect that the company’s “two machines” business revenue in 202123 will be RMB 510 / 820 / 1.23 billion, with a year-on-year increase of 60% / 60% / 50%.
Nuclear power construction may be accelerated, and the company’s nuclear power business can expect high growth. China’s 2021 government work report
It is clearly proposed to actively and orderly develop nuclear power on the premise of ensuring safety. According to the prediction of China Nuclear Energy Industry Association, during the 14th Five Year Plan period, China’s Third Generation Nuclear Power Commission will approve 6-8 units per year. In the context of promoting carbon peaking and carbon neutralization, nuclear power, as a clean energy, is expected to accelerate its development from 2022; The company is an important supplier of nuclear power equipment with strong core competitiveness. We expect the company’s nuclear power business revenue to be 3 / 4 / 490 million yuan in 202123, with a year-on-year increase of 5% / 35% / 20%.
Land acquisition and storage will further optimize the asset structure, and profits are expected to be released quickly. In December 2021, two pieces of land of the company were collected and stored by Hefei, with a compensation of 1.53 billion yuan. It is expected to increase the net income of the company by 210 million yuan in 2022. In January 2022, Huoshan County asked the company to relocate the plant, and the compensation was 978 million yuan. We believe that the two land acquisition and storage is expected to further optimize the company’s asset structure and improve asset quality. Previously, the depreciation of large fixed assets of the company is expected to be significantly reduced and the profit is expected to be released quickly.
Investment advice
It is estimated that the company’s revenue in 202123 will be 2.1/26/3.2 billion yuan respectively, and the net profit attributable to the parent company will be 2.3/5.4/590 billion yuan respectively, and the corresponding PE will be 42 / 18 / 16 times respectively. With reference to comparable companies, the company was given 28 times PE in 2023, with a reasonable valuation of 16.5 billion yuan in 2023, corresponding to a share price of 24.16 yuan. It was given a “buy” rating for the first time.
Risk tips
“Two machines” business is less than expected; Nuclear power business is less than expected; Risk of price fluctuation of main raw materials; The risk of RMB exchange rate fluctuations.
