Jiangsu Shentong (002438): rapid growth in performance optimistic about the growth attributes brought about by new business development such as tedious fuel

Jiangsu Shentong (002438): rapid growth in performance optimistic about the growth attributes brought about by new business development such as tedious fuel

I. Overview of the event The company recently disclosed its 2019 performance report and expects to realize revenue13.

600 million, an increase of 25% in ten years, net profit attributed to the mother1.

810,000 yuan, an increase of 75% in ten years.

Second, analyze and judge the downstream demand is better, reduce costs and increase efficiency, and rapid profit growth is in line with the expected rapid growth in company performance and in line with our budget report expectations.

Q4 single quarter profit is expected to be 49 million yuan, a year-on-year increase of 17%, an improvement over the previous three quarters, mainly due to budget policies and other factors affecting the pace of delivery.

The rapid growth of the company’s performance is mainly due to the increase in revenue brought by increasing demand for valves in the metallurgical and energy petrochemical industries.

Environmental protection requirements are driving the relocation of steel plants. In 2019, the fixed metal investment in ferrous metal smelting will be + 26%.

In addition, the company’s nuclear power valves, flanges and other businesses also performed well.

After the new shareholders took over, the company’s level of intelligent manufacturing and informatization has significantly improved. At the same time, the management of a series of expenses has been strengthened, and the net profit margin has increased.

The safety of the third-generation nuclear power technology has been approved, and the company’s nuclear power valve orders are expected to meet the inflection point. The nuclear power approval in 2019 is restarting. The world’s first AP1000 technology unit, Sanmen No. 1, has been connected to the grid for more than a year, and No. 2 unit has been re-connected to the gridPower generation, three generations of technology safety has been verified.

According to our grassroots research, the construction of Fuqing Units 5 and 6 using Hualong No. 1 technology is progressing smoothly and is expected to be gradually put into operation this year and next.

The 14th Five-Year Plan for Nuclear Power in 2020 is expected to be released, according to 20351.

Estimated 500 million kWh unit operation volume, 6?
Eight nuclear power units were approved for sure.

The company has outstanding competitiveness in nuclear power ball valves, butterfly valves and other fields. It is expected that new projects + stock spare parts maintenance orders each year are expected to reach 5?
600 million to ensure future growth.

The spent fuel reprocessing business has made breakthroughs, and it is expected to continue to create new growth points beyond the main business. In addition to the valve main business, the company’s domestic reserves of spent fuel-related technology and equipment in the early stage of the business will bear fruit during the year.

According to the public research summary, orders for relevant pneumatic sampling systems and storage well equipment will be delivered in 佛山桑拿网 the second half of 2020.

At present, the annual spent fuel processing capacity is only 50 tons per year, and the capacity gap is expected to reach 600 by the end of the 14th Five-Year Plan.
800 tons, market space conduction.

In addition to the spent fuel business, the company is expected to continue to integrate resources, develop military products and other businesses, and continue to create new growth points through the new shareholders Jinxi Department of Industrial Capital and industrial empowerment of Huzhou Fenglin Volcano.

Third, the investment proposal is optimistic about the company’s performance of spent fuel orders in 2020. At the same time, the nuclear power, metallurgy, and energy industry valve business is still in the boom cycle. Expected in 2019?
EPS is 0 in 2021.



75, corresponding 南京桑拿网 to the current expected PE of 24/16 / 12x, surpassing the industry’s average forecast of PE of 29x in 2020. At the same time, the growth attributes brought by new businesses such as spent fuel may provide a premium for the company’s forecast and maintain a “recommended” rating.

4. Risk warnings: 1. The development of the spent fuel market is less than expected; 2. The prosperity of the metallurgical sector is less than expected.