Longxi Group specializes in special bearings such as joint bearings and auto parts. Its products are exported to more than 30 industrialized countries and regions in Europe, America and Asia, and have grown into the largest supplier and largest exporter of domestic articulated bearings in China. The field of articulated bearings is in a dominant position. Longxi Co., Ltd. is the maker of national standards and industry standards for joint bearings and is the leading position in the industry. Longxi Co., Ltd. has a strong research and development capability and established the only joint bearing research institute and joint bearing testing laboratory in the country, and established a postdoctoral research station. Longxi has developed more than 2600 kinds of joint bearings, many of which have been identified as national key new products or included in the national Torch Program.
Segment industry leader
Longxi is principally engaged in the production and sale of joint bearings and roller bearings. The spherical plain bearing has unique performances such as heavy load, adjustable center and so on, so it is widely used in new energy (wind power, nuclear power), aerospace and military, railway locomotives and rail transit, steel construction and road and bridge, large-scale special engineering machinery, heavy duty Automotive, water conservancy and hydropower, metallurgy and mining industries.
The joint bearing is a fine molecular industry in the bearing industry. At present, the market size of the joint bearing industry in China is about 1.6 billion yuan, of which the sales of domestic enterprises are about 600 million yuan, and Longxi shares occupy 60-70% of the market share and are monopolized. . Longxi has 13% share in the international market and is currently the largest joint bearing manufacturer and exporter in China.
Special joint bearing is promising
China's economy is in the stage of industrial upgrading and structural adjustment. New and high-tech industries such as new energy, high-speed railways, large-scale special engineering machinery, and heavy-duty machinery have been identified by the country as key development areas. The development of these fields will give high-end joints to China. Bearing industry brings new opportunities for development. The import value of high-end articulated bearings of 1 billion yuan a year also provides ample space for import substitution by domestic companies. The performance of Longxi Group's products is already at the same level as that of foreign products, and the price of Longxi's shares is only 50-60% of that of similar products of foreign companies, and it has a very high price/performance ratio. Therefore, Longxi Group is expected to gain more market share in the domestic high-end joint bearing market in the future.
Rail transportation: In the next three to five years, the growth of China's rail transit will mainly come from the construction of high-speed passenger dedicated lines, urban rail transit construction, and the increase of electrification rate and double line rate. These industries are also the most widely used in special joint bearings. One of the fields. It is estimated that by 2011, the market demand for special bearings in the field of rail transportation will reach 35 million yuan / 190,000 sets, an increase of more than 250% compared with 2008.
Large-scale special engineering machinery: large-scale hydraulic excavators over 30 tons, large-scale bulldozers over 400 hp, new-type cranes over 100 tons, and large-scale special-purpose wheeled cranes with off-road performance are key development varieties in China's construction machinery industry. It is estimated that the market demand for special bearings in this field will reach 240 million yuan/3.2 million sets in 2011, an increase of over 370% compared with 2008. [next]
Based on the above analysis, we predict that by 2011, the demand for China's special articulated bearing market will reach 538 million yuan. Based on the current market share of Longxi's stock market of 65-70%, it is conservatively estimated that the sales of Longxi Group will reach 352 million. yuan. From the recent export situation of the bearing industry, exports are gradually improving. By 2011, the demand for special joint bearings in the international market will be more than 200 million U.S. dollars, and Longxi shares is expected to account for 15-20 million U.S. dollars.
In order to meet the rapidly growing demand for China's special joint bearings, Longxi shares raised 236 million yuan in 2009 to increase the production capacity of special joint bearings. The project has a construction period of two years and will be completed in 2011. After the completion of the project, new specialties will be added each year. 2.4 million sets of joint bearings, new revenue of 360 million yuan. At present, the project is still gradually advancing, and part of the production capacity will be released in 2010. To sum up, in 2010, the total sales of special joint bearings at home and abroad will reach 486 million yuan, an increase of 286% over 2008.
Gear and transmission capacity expansion
The total market size and production and sales volume of China's gear industry grow at a rate of more than 10 billion yuan each year. The total market size has exceeded the 100 billion yuan mark, and the domestic production and sales volume has reached 85 billion yuan. In order to seize the opportunities of continuous growth in demand in the gear market in recent years and enhance the competitiveness of Longxi's shares and its sustainable development capability, Longxi Co., Ltd. decided to invest 160 million yuan in carrying out the gearing industrialization project for high-end machinery products of Sanming Gearbox Longxi Co., Ltd. in 2009. . The construction period of the project is two years. It will be added after completion: high-precision electro-hydraulic control loader gearbox assembly ZL50 (including gears) 5000 sets, series drive axle assembly (including gears) 5000 sets, ZL60 loading The high-precision electro-hydraulic control gearbox assembly has a total capacity of 1000 sets (a total capacity of 2,000 sets), high-end mechanical product gears and export gears of 100,000 pieces. After the completion of the project, Longxi will increase revenue by RMB 202 million per year, net profit after tax of RMB 17.08 million, and increase its earnings per share by approximately RMB 0.06.
Capital operation expectation
The state-owned Assets Supervision and Administration Commission of Chenzhou City transferred 31.39% of the equity of Longxi Electrical and Mechanical Co., Ltd. to Piziqi Group [41.94-4.12%]. Thus, the share of Long Pi shares held by Pioneer Pipa Group reached 40.41%, becoming the largest shareholder of Longxi. Since the Ganzhou SASAC has a strong willingness to grow and strengthen Longxi Co., Ltd. [9.31-5.00%], and has the intention of introducing strategic investors, the equity transfer may be the future of the Longxi Group. Prelude to a series of capital operations. After the equity transfer, the concentration of major shareholders’ equity is further increased, which is beneficial to the follow-up series of operations of the SASAC.
profit prediction
We forecast that the Longxi share EPS for 2010-2012 will be 0.38, 0.57 and 0.76 respectively, and the compound annual growth rate for the next three years will be 47%. DCF's valuation shows that the intrinsic value of Longxi's shares is 14.11 yuan, giving it a "buy" rating for the first time.
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