\u3000\u3000 Zhejiang Kaishan Compressor Co.Ltd(300257) (300257)
Continue to cultivate the core technology of compressor and develop complete sets of equipment to the overseas market. Compressor is a kind of fluid machinery that promotes low-pressure gas into high-pressure gas. It plays an irreplaceable role in machinery manufacturing, chemical and petrochemical, mining and metallurgy. China’s high-end compressor market is mainly occupied by overseas enterprises. The competition in the medium and low-end market is fierce. International famous enterprises such as Atlas of Sweden, Ingersoll Rand of Ireland and Sullair of Japan have established certain advantages in the high-end field. Zhejiang Kaishan Compressor Co.Ltd(300257) is a leading comprehensive compressor manufacturer in China. Its screw compressor, centrifugal compressor and oil-free compressor have obvious technical advantages in China. At the same time, its screw compressor business ranks third in the world and first in Asia. At present, the single-stage and two-stage products of the whole spectrum of screw air compressors of the company have reached China’s national energy-saving product standards, and all its high-end series products have reached China’s national first-class energy efficiency and super first-class energy efficiency. The technology of high-end compressors such as oil-free compressors and centrifugal compressors in China is relatively backward. Most enterprises are in the stage of R & D or early promotion. Zhejiang Kaishan Compressor Co.Ltd(300257) has made a breakthrough in the field of large and high-end compressors. Centrifugal compressors have achieved a certain market and are competing with Atlas and other international leaders. The company continues to promote the global layout and the rapid development of overseas business. In 2020, the overseas business revenue reached 795 million yuan, accounting for 26% of the company’s total revenue. The growth of overseas business has laid a solid foundation for the company’s growth. The company will continue to increase the proportion of service business income. From the sales structure of overseas leading atlas, the proportion of service business income in its compressor business will be as high as 43% in 2020. Compressor after-sales service income is an important source of income. In the future, Kaishan will encourage and require dealers to purchase more original parts and consumables of the company, assess dealers, and improve the proportion of service income in the source of the company’s revenue.
Geothermal development has achieved initial results, accelerated growth and ushered in a performance inflection point. Geothermal energy is an important clean and renewable energy. According to the research reports of the International Energy Agency, the Chinese Academy of Sciences and the Chinese Academy of engineering, the total amount of basic geothermal energy resources in the world is 1.25 × 1027 joules (equivalent to 4.27 × 10.8 billion tons of standard coal), which is more than 2 million times the total annual consumption of primary energy in the world. At present, in the global geothermal power generation mode, the capacity expansion power generation system accounts for 57% of the geothermal power generation market. Geothermal energy has a long history of development and utilization, and the global installed capacity of geothermal power generation is about 16GW. By the end of 2019, the top 5 countries with cumulative installed capacity of geothermal power generation in the world were the United States, Indonesia, the Philippines, Turkey and New Zealand, with cumulative installed capacity of 2555mw, 2131mw, 1928mw, 1515mw and 965mw respectively, accounting for 65.78% of the global total. The company’s screw expander has strong applicability and lower cost. The company’s original “one well, one station” technology maximizes the resource utilization of each wellhead, and has the technical and economic advantages of wide application range, low investment intensity, high efficiency and easy maintenance. At present, the company has a number of overseas projects, including smgp in Indonesia and wabuska in the United States. Among them, phase I and phase II of GMGP in Indonesia have been stably connected to the Internet. At present, the company is rich in geothermal resources, which can support the rapid development of the company. In the future, geothermal power generation business will become the core growth point of the company.
The dual carbon trend is in the ascendant, and the high-efficiency compressor is expected to be replaced by the stock. The company is practicing the “four core strategies” and gradually moving forward to the international leader. The company has maintained a growth trend in scale since 2016. In the first three quarters of 2021, the company achieved a revenue of 2.574 billion yuan, a year-on-year increase of 18.73%. In 2020, the net profit attributable to the parent company was 256 million yuan, reaching 230 million yuan in the first three quarters of 2021, a year-on-year increase of 16.80%. The company’s gross profit margin began to decline in 2014 and increased rapidly in 2019. In 2020, the company’s gross profit margin was 30%, the highest in recent 10 years. In general manufacturing enterprises, the power consumption of compressor air system accounts for 10 ~ 20% of the total power consumption of enterprises, and 96% of the energy consumption of compressed air system is the working consumption of compressors. Therefore, reducing compressor energy consumption can effectively reduce the production cost of enterprises. Screw expander can realize waste heat recovery and effectively reduce carbon emission. Energy conservation and emission reduction is an important direction of China’s future industrial development. The compressor and expander of Zhejiang Kaishan Compressor Co.Ltd(300257) play an important role in the field of energy conservation and emission reduction. The company’s main equipment business will have a better development policy environment in the future.
Profit forecast and investment rating: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 314 million yuan, 544 million yuan and 861 million yuan respectively, and the corresponding EPS will be 0.32 yuan / share, 0.55 yuan / share and 0.87 yuan / share respectively. The corresponding PE share price on January 17, 2022 will be 53.51 times, 30.85 times and 19.5 times respectively. For the first time, give the company a “buy” rating.
Stock price catalyst: China’s “double carbon” policy promotion; Smgpl project was officially launched
Risk factors: deterioration of macroeconomic environment; The project construction is less than the expected risk; Team building and management capability risk; Increase in financial expenses and risk of exchange rate changes.
