Zhongyan Technology (003001) 国盛证券·2024-07-17 00:31Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 16.23 CNY per share [75] Core Views - The company is a leader in China's geotechnical engineering industry, with significant growth potential in nuclear power, hydropower, and port/bridge projects [46][73] - The company has three core competitive advantages: 1) advanced ground treatment technology (SJT), 2) pile foundation engineering (DMC and EMC composite piles), and 3) soft soil solidification materials [49] - The company's revenue from real estate-related projects has decreased significantly, with new orders in 2024Q1 showing only 17% from real estate, while nuclear power, hydropower, and port/bridge projects are becoming the main growth drivers [127][73] Geotechnical Engineering Industry Overview - The global geotechnical engineering market is approximately 3700 billion CNY, with strong regional characteristics [99][130] - China's geotechnical engineering industry is still in a "Warring States" period with low concentration, providing opportunities for the emergence of industry leaders [46][58] - The industry is shifting from traditional real estate applications to more challenging projects in nuclear power, hydropower, and port/bridge construction, which require higher technical expertise [73][140] Company's Competitive Advantages - Super Jet Grouting Technology (SJT): The company's core ground treatment technology can reach depths of up to 70 meters and has been applied in the construction of the Zhangjinggao Yangtze River Bridge, the world's largest suspension bridge [8][10][14] - DMC and EMC Composite Piles: The company has developed two types of composite pile technologies, which offer higher efficiency, environmental friendliness, and cost-effectiveness compared to traditional pile foundations [15][18][20] - Soft Soil Solidification Materials: The company has developed a proprietary soft soil solidification agent that significantly improves soil strength and stability, with applications in land reclamation and other large-scale projects [25][27][41] Growth Opportunities - Nuclear Power: The company has successfully entered the nuclear power geotechnical engineering market, with projects in nuclear power plant foundation treatment and land formation [117][73] - Hydropower: With China's abundant hydropower resources, especially in Tibet, the company is well-positioned to benefit from large-scale hydropower projects [119][120][148] - Ports and Bridges: The increasing complexity of port and bridge projects in China is driving demand for advanced geotechnical engineering solutions, particularly in coastal areas with challenging soil conditions [1][3][5] Financial Projections - The company is expected to achieve revenue of 1,045 million CNY in 2024, 1,340 million CNY in 2025, and 1,761 million CNY in 2026, with net profits of 77 million CNY, 112 million CNY, and 145 million CNY respectively [50][152] - The company's PE ratio is projected to be 26.8x in 2024, 18.4x in 2025, and 14.1x in 2026, indicating strong growth potential [50][154]