• Shenyang Baoshan Woodworking Machinery

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Machinery Industry Weekly: Woodworking Machinery High Growth Sustained
Jun 06, 2018

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Investment point

Zhonghe technology (000925) : the leading signal system of subway, self-developed system is about to break out.

1) the demand for urban rail signal system and AFC/ACC in the 13th five-year plan period is expected to exceed 50 billion yuan and 30 billion yuan respectively, and the annual compound growth rate in five years is 20%.

The market share of the company's signal system and AFC/ACC business is in the forefront of the industry, which will fully benefit from the huge market space of the urban rail industry.

2) the gross profit rate of the self-developed signal system is about twice that of the previous sino-foreign cooperative products, and its profitability is outstanding.

In 2017, the orders of the company's self-developed signal system reached 959 million yuan, accounting for 36.6% of the new orders of signal system in the same year, up 464% year on year, and the volume trend is obvious.

3) in 2017, the company realized new orders of 4.461 billion yuan, up 187% year on year.

In particular, new orders for the rail transit signal system reached 2.589 billion yuan, more than doubling in two consecutive years. The rail transit business is about to reach a turning point of revenue and profit.

We estimate that the company's net profits from 2018 to 2020 will be 140 million yuan, 281 million yuan and 492 million yuan respectively, giving the "prudent overweight" rating.

Orders for woodworking machinery remained high and cash flow was good.

Board woodworking machinery benefits from the upgrade of customized furniture consumption, and new orders keep growing rapidly.

At the same time, because of custom furniture enterprise is mainly mainly B2C mode, industry chain good cash flow and Suggestions focus on hongya nc (orders production scheduling, capacity gradually released, and MAsterwood synergistic effect appeared in succession, the product structure upgrade and new customers to develop double), south xing and equipment.