Changbao (002478)
Changbao focuses on the production of special seamless steel pipes with small and medium-sized diameters. Its main products are oil well pipes and boiler pipes, with high brand awareness and a high proportion of exports. The company has been established for more than 60 years, and is located in the middle of the industrial chain. The upstream raw materials are bars, and the downstream customers are mostly well-known enterprises at home and abroad in the fields of oil and gas, boilers, and machinery. At present, the production capacity is about 1 million tons, and the sales volume in 23 years is 790000 tons. The gross profit of oil well tube and boiler tube accounts for 64% and 25% respectively, which are the company's main products.
Downstream oil and gas Capex grew moderately, and thermal power boilers continued to prosper. It is expected that the global oil and gas capital expenditure will rise moderately in 23-26. The company's main export market, the Middle East, will spend 16 billion US dollars on drilling services in 23 years. It is expected that the capital expenditure will continue to rise in 24-26 years and reach about 19 billion US dollars by 26 years, which is expected to boost the company's demand for oil well pipes.
In terms of thermal power boilers, the newly installed capacity of coal power in China was about 41GW in 23 years, with a year-on-year increase of 53%. China's coal power approval exceeded 90GW/year for 22 to 23 consecutive years, which is expected to support the boom and sustainability of demand for thermal power boiler tubes.
The external environment since the epidemic covered the qualitative change of the company in recent years, and increased equipment and R&D investment paved the way for transformation. In terms of equipment, the company has increased investment in fixed assets since 18 years ago, and continued to improve high-end and efficient advanced production lines. In terms of R&D, the number of new markets, new customer development and R&D expenses of the company in 23 years have all reached a new high. However, affected by the epidemic, the cancellation of export tax rebates, and the rise of bulk raw materials, the ROE was less than 5% in 20 and 21 years. With the downstream demand restoration and the signing of new orders, the ROE reached 16% in 23 years.
The project of new energy vehicle precision tube and 8500 tons of special materials was launched, and the high-end transformation was just in time. In 23 years, the company started two new field projects, namely, the 50000 ton new energy vehicle precision tube project and the 8500 ton new energy and semiconductor special materials project. After the completion of the two projects, the output value will be about 1.3 billion yuan, which is expected to significantly boost the company's profitability and high-end transformation.
It is estimated that the EPS of the company will be 0.88 yuan, 0.99 yuan and 1.10 yuan/share respectively in 24-26 years, and that the comparable company will be 10XPE in 24 years, with a target price of 8.80 yuan, and will be given a buy rating for the first time.
Risk warning
The risk of lower than expected capital expenditure on downstream oil, gas and thermal power, the risk of lower than expected product development and customer certification, the risk of lower than expected release of new energy vehicle precision pipe and special pipe projects, the risk of lower than expected sales of new projects, profit margin, the risk of fluctuations in raw material prices, significant fluctuations in exchange rates and changes in the export environment The risk that the macro-economy is not as expected.
