\u3000\u3000 Shaanxi Construction Machinery Co.Ltd(600984) (600984)
Key investment points
Pangyuan index has entered the bottom grinding stage, and the rental demand for construction equipment is expected to bottom out and pick up
At the end of 2021, the central government released stability maintenance signals twice, opening the prelude to the foundation of trust policy. In November, the growth rate of real estate sales and operation stopped falling and rebounded, showing signs of marginal improvement; At present, the year-on-year growth rate of real estate development investment continues to decline, but the downward range tends to narrow after the marginal easing of credit policy. With the advent of peak season, the demand for construction equipment leasing is expected to stabilize and pick up.
Since 2021, pangyuan index has shown a downward trend. At present, it has entered the stage of gradually grinding the bottom, and the downward space is expected to be limited. In December, the utilization rate of pangyuan equipment per ton meter was 65.1%, which was the lowest level in the month in history. Pangyuan leasing timely adjusted its strategy, actively explored new markets, promoted the construction of intelligent manufacturing remanufacturing and leasing service comprehensive base, realized the initial coverage of core areas, accelerated the layout of second and third tier cities, reduced the service radius, strengthened the production remanufacturing capacity, service efficiency and quality, and continuously improved the operating efficiency.
The penetration rate of prefabricated buildings remains unchanged, and the compound growth rate of large and medium-sized tower crane leasing will be 19% in the next five years
Pangyuan leasing, a wholly-owned subsidiary, is the global leader in tower crane leasing, contributing most of its performance. In 2020, pangyuan leasing realized a net profit attributable to the parent company of 750 million yuan, with a compound growth rate of 54% in recent five years. With the development of prefabricated buildings driving the growth of rental demand for large and medium-sized tower cranes, the penetration rate of prefabricated buildings in China is expected to increase to 30% in 2025. In 2020, the total scale of tower crane leasing is 103.6 billion yuan, of which the scale of large and medium-sized tower leasing market is 23.2 billion yuan. Under the assumption of zero growth of new construction area in the next five years, the demand for tower crane leasing will reach 133.5 billion yuan in 2025, with an average annual growth of 5%; Among them, the rental demand for large and medium-sized towers will reach 54.3 billion yuan, with an average annual compound growth rate of about 19%.
The compound growth rate of revenue of pangyuan leasing in the next five years will exceed 25%, and the market share will increase from less than 4% to 10-15%
1) there is much room to improve the market share. In 2020, the market share of pangyuan tower crane is less than 2%, the market share of total tons and meters is about 3.5%, and the market share of revenue scale is 3.7%. It is estimated that the market share of pangyuan's revenue scale is expected to increase to 10-15% in 2025 (the market share of American Joint leasing, the leader of construction machinery leasing, exceeds 12% in the United States). The compound growth rate of pangyuan's rental income is expected to exceed 20% in the next five years.
2) new orders increased year-on-year throughout the year, and the utilization rate of ton meter rebounded. In 2021, the new orders of pangyuan leasing increased by 4.2 billion yuan, an increase of 200 million yuan over the new orders in 2020, a year-on-year increase of 5%. In 2019, pangyuan's ton meter utilization rate was 72%, and in 2020, it decreased to 64% affected by the epidemic. It began to recover gradually at the end of 2020, and the annual average ton meter utilization rate rose to 66% in 2021.
3) prominent advantages in capital, management and scale, with an average annual growth rate of more than 24% in the next five years. The company is backed by Shaanxi coal group, and the financing cost is low. As of December 31, 2020, the number of pangyuan tower cranes has reached 8261, an increase of 2271 over the end of 2019, and the number of new tower cranes has increased by 38% year-on-year. It is estimated that the annual equipment investment of the company is expected to reach 2-2.5 billion yuan in the next two years. By the end of 2022, the number of tower cranes is expected to exceed 13000, and the corresponding total ton meters is expected to increase to about 2.59 million tons, with an average annual growth of more than 24%. The growth rate is significantly higher than the industry average level, and it is expected to continue to improve the scale advantage.
Profit forecast and valuation
We expect the company to realize a net profit attributable to the parent company of RMB 580 / 8.1/1.06 billion from 2021 to 2023, with a year-on-year increase of 5% / 39% / 31%, corresponding to EPS of RMB 0.60/0.84/1.09 and current PE of 19 / 14 / 11 times, maintaining the "buy" rating.
Risk tips
Investment in real estate infrastructure was significantly lower than expected; The development of prefabricated buildings is less than expected; Other business operations of the parent company were not as expected
