\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 50 Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) )
Key investment points
The CAGR of revenue and net profit of China’s large slewing ring leader in the past four years is 55% and 78%
The company focuses on the production of large slewing ring. In 2020, the revenue and gross profit of wind power products accounted for 88% and 91% respectively; From 2017 to 2020, the CAGR of the company’s revenue and net profit were 55% and 78% respectively. Among wind power products, the revenue share of yaw pitch bearing increased from 36% to 60%, and the revenue share of main shaft bearing increased from 6% to 25%.
Completion of large slewing ring platform layout: create a “double platform” strategy, a large platform strategy with wind power bearing as the core, including shield machine and marine equipment bearing, and a small platform strategy with wind power spindle bearing, gearbox bearing and yaw pitch bearing as the core.
It is estimated that the CAGR of wind power bearing market will be 25% from 2021 to 2025. The high prosperity of the industry will continue to be driven by the dual carbon target. The rapid realization of parity of wind power will drive the rapid growth of new installed capacity. It is estimated that the CAGR of new wind power installed capacity from 2021 to 2025 will be 18%. Under the trend of large-scale fans, the number of newly installed units is reduced by 30% compared with 2020, but the value of bearings used by a single fan is increased by 3.4 times compared with 2020. We estimate that China’s wind power bearing market will be 29.5 billion yuan by 2025, and the CAGR will be 25% from 2021 to 2025.
The localization rate of main shaft bearings and gearbox bearings is the lowest, and the company is ahead of its Chinese counterparts in large MW bearings
1) in 2020, the overall localization rate of China’s wind power bearing market is about 16%. Among them, the localization rates of spindle and gearbox bearings are the lowest, 33% and 0.6% respectively; The localization rate of yaw bearing and pitch bearing is relatively high, 63.3% and 86.6% respectively.
2) the company leads its Chinese counterparts in the R & D and industrialization of megawatt bearings. In 2020, the company’s 3MW spindle bearings have been supplied in batches; In 2021, 5MW spindle bearings have been supplied in small quantities; The offshore 5.5MW yaw pitch bearing of the company has realized small batch supply, and took the lead in developing and issuing independent pitch bearing. Batch supply has been realized on small MW fans in 2021, and will be successively supplied on large MW fans in 2022.
3) the company has obvious advantages in R & D and industrialization of large MW bearings, and is expected to fully benefit from the trend of large-scale fan. From 2016 to 2020, the market share of the company’s yaw pitch bearing increased from 7% to 14%, and the market share of main shaft bearing increased from less than 1% to 4%. With the gradual release of the company’s raised and invested capacity, it is expected that the market share of yaw pitch bearing will increase to 37% and that of main shaft bearing will increase to 15% by 2025.
Profit forecast and valuation
It is estimated that the net profit from 2021 to 2023 will be 520 million, 700 million and 1.02 billion respectively, with a year-on-year increase of 22%, 35% and 45%, corresponding to 42 times, 31 times and 22 times of PE. Give the company 44 times PE in 2022, corresponding to the target price of 158.76 yuan / share, an increase of 40% from the current price. For the first time, give the company a “buy” rating.
Risk tips: 1) price risk of raw materials; 2) Risk of deterioration of competition pattern; 3) New product validation risk
