\u3000\u3000 Shanghai Hugong Electric Group Co.Ltd(603131) (603131)
China is a leader in welding and cutting equipment, and the new base is put into operation to boost performance growth. The company is one of the largest welding and cutting equipment manufacturers in China. In 2020, it was selected as the second batch of specialized new "little giant" enterprises. Its products have a wide range of applications and are exported to many countries and regions around the world. In recent years, the company has increased investment in digital welding machine, intelligent welding machine, Siasun Robot&Automation Co.Ltd(300024) complete welding system, intelligent factory and other fields, as well as expansion in relevant industrial chains; Continue to strive to expand the global market share, give full play to the import substitution effect of products, and further explore and tap deeper markets. Based on the technology accumulation of automation and intelligence in the industrial Siasun Robot&Automation Co.Ltd(300024) field, the holding subsidiary Shenxing Siasun Robot&Automation Co.Ltd(300024) has expanded its business scope from a single automobile industry to a general industrial field. Phase I of the intelligent manufacturing production base invested and built by Taicang has been put into operation, providing solid support for the company's business expansion.
We will continue to develop military business and accelerate capacity expansion. The company is the core supplier of the first Aerospace Research Institute, which is responsible for the production and assembly of launch vehicles and strategic missiles. With strong downstream demand, the company actively expands production. Nanchang aerospace equipment manufacturing base has been completed and put into operation. In the first half of 2021, the company's aerospace business revenue increased rapidly year-on-year. At the same time, the company undertakes the commercial satellite assembly business of the eighth Academy of Astronautics. From 2021 to 2025, China Spacesat Co.Ltd(600118) Internet industry will reach $15 billion, and drive the market scale of upstream and downstream industries to reach $50 billion-80 billion. The project has entered the landing stage, and the company is expected to directly benefit. The company has realized the deep integration of upstream and downstream of the aerospace industry chain. In the first half of 2021, Shanghai Bochuang space thermal energy technology Co., Ltd. was established. Its main business includes the field of aerospace phase change thermal control products. The products are widely used in satellite communication loads, 5g base stations and other application scenarios. The multi-point flowering of the aerospace industry provides a solid driving force for the stable growth of the company.
The layout of production capacity in Nanchang is expected to fully enjoy the benefits of spillover industries. Jiangxi Hongdu Aviation Industry Co.Ltd(600316) located in Nanchang, it is the production base of Chinese trainer aircraft. In recent years, trainer aircraft and defense business have developed rapidly. 660 Institutes under Hongdu group are the only Missile Research Institute and the only air surface missile research institute in the aviation industry system. At the same time, the market share in the field of civil aircraft is gradually growing. It is responsible for most of the production tasks of ARJ21 regional aircraft that has been mass produced and C919, a large domestic aircraft that will be mass produced. The company plans production capacity in Nanchang and is expected to strengthen cooperation with Hongdu. It will fully enjoy the benefits of spillover industry and provide a solid foundation for the long-term and stable development of the company.
Profit forecast and investment rating: Based on the development prospects of the company's military and civil business, we expect the net profit attributable to the parent company from 2021 to 2023 to be 204 / 341 / 457 million yuan respectively, EPS to be 0.64/1.07/1.44 yuan respectively, corresponding to 41 / 24 / 18 times of PE. It is covered for the first time and given a "buy" rating.
Risk tips: 1) downstream demand and order fluctuation; 2) The company's profit is less than expected; 3) Market systemic risk.
