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Riyue Co., Ltd. (603218) First Coverage Report: Industry Demand Boom Expands and Consolidates Competitive Advantage

29/03/2020 0 Comment

Riyue Co., Ltd. (603218) First Coverage Report: Industry Demand Boom Expands and Consolidates Competitive Advantage

Ping An’s view: The demand for high-quality castings is good for wind power castings.

Since its establishment, the company has always focused on the research and development, production and sales of large-scale heavy industry equipment castings. Its main products are wind power castings and plastic machinery castings.

In the context of rush installation, the domestic wind power industry has a high degree of prosperity. It is estimated that the new installed capacity of domestic wind power will exceed 25GW in 2019, and the new installed capacity will exceed 30GW in 2020.

In 2021, the domestic wind power industry has entered the parity era, and large parity base projects in the north have emerged in batches. Inner Mongolia alone, more than 15GW of parity or quasi-parity projects will emerge in 2019; benefiting from technological advances in long blades, high towers, etc.Parity projects in the southern Middle East also have potential.

The supply of wind power castings is rigid, and the company’s competitive advantage is obvious.

Wind power castings are asset-intensive and labor-intensive industries, involving environmental protection factors. The new production capacity construction cycle is long, and the capacity expansion is relatively severe. The short-term supply and demand relationship is mainly affected by demand.

Based on its excellent operation and management capabilities, the company has obvious competitive advantages in terms of wind power casting production capacity, production costs, and cost control, as well as stronger expansion capabilities. The company’s competitive advantage is continuously strengthened by continuing to expand.

The amount 深圳桑拿网 of profits and profits can be expected to enter the fast-track of growth.

In terms of casting blanks, the company’s annual production of 18 short-term (first-stage 10-month) offshore equipment key components of the company has passed pre-acceptance, and the next two 8-phase projects have begun to start construction. The rough capacity in 2020 is expected to exceed 380,000 tons;In terms of processing, the IPO raised 10 target capacity projects and gradually put into production, and the construction of convertible bond investment projects is expected to start.

In the current wind power industry rush installation background, there may be supply and demand substitution of wind power castings, and the current profitability of wind power casting enterprises is at a historical level, and the overall profitability of the industry is expected to improve.

In the future, the company is expected to improve its profitability by optimizing its product structure and expanding its finishing capacity.

Earnings forecasts and investment advice.

It is estimated that the company’s operating income for 2019-2020 will be 34.

01, 44.

8.4 billion, net profit attributable to mother4.

94, 8.

02 trillion, corresponding to EPS 0.

93, 1.

51 yuan, dynamic PE 19.

7, 12.

1 times.

The competition pattern of wind power castings is relatively better. As a leader in wind power castings, the company has room for growth, covering for the first time, and given a “recommended” rating.

risk warning.

1. If the wind power policy changes, it may cause the domestic installed capacity to increase less than expected.

2. The company’s main raw materials are pig iron and scrap steel. If the price of raw materials rises in the future, the overall gross profit rate may be lower than expected.

3. The construction of new production capacity involves environmental protection and other factors, and there may be a risk that the construction progress is less than expected.