\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 399 Fushun Special Steel Co.Ltd(600399) )
Core conclusion
Event: Recently, the company announced that in the third quarter of 2021, the company applied to Liaoning Branch of China Development Bank for a five-year special loan with a total amount of no more than 900 million yuan for the construction of important production projects. At present, the loan application has been approved by the bank and the first loan contract has been signed.
The prosperity of the industry has been upgraded, and the demand for superalloy as the core material of aeroengine train loading has accelerated. The performance of aeroengine mainly depends on the main indexes such as the temperature in front of the turbine and the thrust weight ratio. For every 100k increase in the turbine inlet temperature, the thrust weight ratio of aeroengine can be increased by about 10%. Therefore, superalloy materials have become one of the key factors restricting the development of aeroengine. According to the calculation, we expect that the annual average demand of China’s main application fields of superalloys will reach about 85000 tons in 21-25 years, and the application proportion of Aerospace will increase from 55% in 19 years to 68%. At present, the total capacity supply of China’s core superalloy base metal manufacturers is less than 30000 tons, the gap between supply and demand in the industry is huge, and enterprises with perfect capacity layout will take the lead in benefiting.
Step up the construction of production lines and highlight the advantages of Fushun Special Steel Co.Ltd(600399) production capacity. The superalloy industry has the comprehensive characteristics of high capital and high technical barriers. Only no more than 50 enterprises worldwide have the ability to produce Superalloys for aerospace. Fushun Special Steel Co.Ltd(600399) relying on its first mover advantage in the industry, it has actively invested in R & D and actually transformed into production capacity. In view of the strong demand of Chinese downstream customers for the company’s deformed superalloys, Fushun Special Steel Co.Ltd(600399) it is planned to invest about 1.4 billion yuan in the construction of expansion projects and related technical transformation in 20-23 years. After the capacity is built, the company will become the first 10000 ton high-quality superalloy manufacturer in China. After the implementation of this special loan, we judge that the company’s core business has the possibility of exceeding the expected capacity.
Investment suggestion: we expect the net profit attributable to the parent company to be RMB 782 / 1052 / 1307 million respectively from 21 to 23, with a year-on-year increase of 41.73% / 34.54% / 24.22%, and the corresponding EPS is RMB 0.40/0.53/0.66. Taking into account the company’s technical advantages in the superalloy track and the rapid pace of capacity release, we maintain the “buy” rating.
Risk tips: 1 The price of nickel, the core raw material, rose by 2.5% The price of fuel, electricity and other cost side factors increased by 3.5% Industry demand was lower than expected.
