\u3000\u3000 Western Superconducting Technologies Co.Ltd(688122) (688122)
Key investment points
It is mainly engaged in superconducting materials / titanium alloys / superalloys, with a compound growth rate of 39% / 66% in revenue / net profit in the past three years
Main products: titanium alloy bar / wire / forging stock for fourth generation military aircraft manufacturing, superconducting products and Superalloys for Aeroengines; Industrial chain: the upstream is sponge titanium / Niobium / tin and other metal materials, which are prepared by the company into titanium material / superconducting wire / superalloy, and the downstream is widely used in military aircraft (titanium alloy), medical nuclear fusion (superconducting) and aeroengine (superalloy); Finance: the compound growth rate of revenue / net profit in the past three years was 39% / 66%, the revenue of titanium alloy / superconducting products / superalloy accounted for 82% / 8% / 4% in 2021, and the compound growth rate of revenue of the three in recent three years was 40% / 33% / 1068%.
Market pattern: military titanium alloy Baoji Titanium Industry Co.Ltd(600456) / Western Metal Materials Co.Ltd(002149) and the company are the main suppliers; At present, the company is the only low-temperature superconducting wire rod manufacturer in China and the only whole process manufacturer of niobium titanium ingot rod, superconducting wire rod and superconducting magnet in the world; Superalloys compete differently with Gaona Aero Material Co.Ltd(300034) / Fushun Special Steel Co.Ltd(600399) .
Fixed increase and expansion of production: in December 2021, the company raised 2.013 billion yuan (additional offer price of 88.39 yuan / share) for Aerospace metal material industrialization / superconducting wire rod industrialization / superconducting Innovation Research Institute, etc. after the expansion, the production capacity of titanium alloy / superalloy / superconducting wire rod is 10000 / 6000 / 2000 tons respectively, and sufficient production capacity can effectively ensure the continuous realization of performance.
Titanium alloy: boosted by the fourth generation military aircraft + missiles / ships / civil aviation, the compound growth rate of revenue in 2021-2023 is 33%. The proportion of military aircraft loading + titanium alloy of new generation aircraft is increased + new military aircraft engine / maintenance consumption + large volume of commercial aircraft. China’s aerospace high-end titanium alloy market has broad prospects;
Fixed increase and expansion of production + full orders on hand. It is estimated that the cumulative revenue from 2021 to 2023 will be 10.1 billion, with a compound growth rate of 33%.
Superalloy: benefiting from the blue ocean space of military aero-engine, the compound growth rate of revenue in 2021-2023 is 108%. New train installation + regular maintenance and replacement of military aero-engine, significant volume of civil domestic large aircraft engines and general aviation aircraft engines, and a large number of potential demand for gas turbines such as nuclear power and ships. It is expected that the average annual market demand of Superalloy will be 23.5 billion in the future;
The company has broken through the batch production technology of several key brands of superalloys and obtained the supply qualification. It is expected to expand the production capacity to 6000 tons / year by 2025, and the future revenue will increase with the capacity expansion; It is estimated that the compound growth rate of revenue from 2021 to 2023 will be 108%.
Superconducting wire rod: it is estimated that the cumulative revenue from 2021 to 2023 will be 1 billion, with a compound growth rate of 25%
High demand for medical nuclear magnetic resonance + accelerated development of semiconductor equipment market + continuous R & D investment in nuclear fusion field. The company ranks first in scarcity + monopoly attribute. It is estimated that the cumulative revenue from 2021 to 2023 will be 1 billion, with a compound growth rate of 25%.
Profit forecast and valuation
It is estimated that the net profit from 2021 to 2023 will be 650 / 83 / 11.1 billion, with a growth rate of 76% / 26% / 34% and PE of 53 / 42 / 31 times. The current share price is lower than the recent additional offering price (88.39 yuan / share). First coverage, buy rating.
Risk tips
Risk of raw material price fluctuation and lower downstream loading speed than expected
