Baimtec Material (SH:688563) Guoyuan Securities·2024-10-10 08:00Investment Rating - The report assigns an "Accumulate" rating for the company [1]. Core Views - The global aviation industry is recovering, which will help release the potential of new aviation materials. The demand for military aircraft is expected to grow, particularly in China, as the country upgrades its military aircraft. Additionally, the Chinese commercial aviation market is projected to become the largest single aviation market globally, with approximately 43,644 new aircraft deliveries expected over the next 20 years, valued at around $6.5 trillion [2]. - The company has shown steady growth in its operating performance, with a compound annual growth rate (CAGR) of 14.74% in net profit from 2019 to 2023. In 2023, the company achieved a revenue of 2.803 billion (up 20.01% year-on-year) and a net profit of 576 million (up 30.23% year-on-year) [2][24]. - The company possesses strong technical foundations and research capabilities, solidifying its position as a leader in the aviation materials industry. It is a major supplier of titanium alloy castings, rubber sealing materials, and transparent components for aircraft [2][11]. Summary by Sections 1. Steady Growth of Aviation Material Leader - The company is a high-tech enterprise focused on the research, production, and sales of aviation and aerospace components and materials, with a leading domestic technology advantage [11]. - The company has four main business divisions: titanium alloy precision casting, rubber and sealing materials, aircraft cockpit transparent components, and high-temperature alloy casting [11]. 2. Dual Demand from Military and Civilian Sectors - The military aircraft market has significant potential, while the civilian aircraft market continues to show strong demand. The company is well-positioned to benefit from both sectors [2][11]. 3. High Profitability of Rubber Sealing Materials and Rapid Development of High-Temperature Alloy Business - The company has maintained high profitability in its rubber sealing materials segment, with a CAGR of 20.61% in revenue from 2019 to 2022. The high-temperature alloy business has also seen rapid growth, with a CAGR of 39.89% during the same period [24][30]. 4. Investment Recommendations and Profit Forecasts - The company is expected to see net profits of 730 million, 918 million, and 1.122 billion for the years 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (P/E) ratios of 33.40, 26.56, and 21.74 [2][3].