【Depth】Wuxin Tunnel Installation 835174: "Little Giant" of Intelligent Equipment for Tunnel Construction and Mining, Aftermarket Opens Business Ceiling--Open Source Beijing Stock Exchange

The "little giant" aftermarket of intelligent equipment for tunnel construction and mining has opened the business ceiling

·Guide·

Tunnel construction and mining intelligent equipment company, stabilize the basic disk + strengthen the growth disk + develop the potential disk
Deeply cultivated in the field of railway + highway, water conservancy and hydropower have developed rapidly, and the mining market scale is as high as 100 billion
Benchmark industry benchmark Epiroc, dig deep into the aftermarket and overseas markets

⭐ A collection of research at the end of the article | We have focused on the research of the New Third Board and the Beijing Stock Exchange for 10 years 🏆

Tunnel construction and mining intelligent equipment company, stabilize the basic disk + strengthen the growth disk + develop the potential disk

Founded in 2010, Wuxin Tunnel Equipment Co., Ltd.'s main products include tunnel products, mining products, rock drills (parts), and provide leasing services and after-sales service, which are used in railways, highways, water conservancy and hydropower, mines and other fields. In 2023, the revenue will be 954 million yuan (+76%), the net profit attributable to the parent company will be 164 million yuan (+111%), and the gross profit margin/net profit margin will be 37%/17% respectively. As of the end of 2023, the company has 350 patents (including 75 invention patents), and has core technologies such as intelligent control technology and high-performance pumping system technology. We expect the company's net profit attributable to the parent company in 2024-2026 to be 1.88/2.23/266 million yuan respectively, the corresponding EPS is 2.09/2.48/2.96 yuan / share, and the corresponding current stock price PE is 8.2/6.9/5.8X respectively. Deeply cultivated in the field of railway + highway, water conservancy and hydropower have developed rapidly, and the mining market scale is as high as 100 billion

The scale of investment in fixed assets of railways + highways is relatively stable, and there is a demand for mechanization to replace labor in existing projects + the infrastructure demand of incremental projects in the Belt and Road countries is growing rapidly, which promotes the steady growth of the company's basic products, and the company's concrete wet spraying machine/group, trolley and other equipment continue to be updated to seize the share. In addition, water conservancy and hydropower projects in mainland China are progressing rapidly, with an investment of more than 1.1 trillion yuan in water conservancy construction completed in 2023, and pumped storage power stations such as Lingshou in Hebei Province will be built, and the company will participate in the construction of Baihetan Hydropower Station and other projects, and related fields will grow rapidly. In addition, relying on the accumulation of tunnel equipment technology, the company has entered small and medium-sized non-coal mines, and the intelligent tunneling drill products have solved the mechanized construction problems of small and medium-sized roadways below 3×3M, and accumulated high-quality customers such as Shandong Gold, Xinjiang Nonferrous Metals, Hunan Nonferrous Metals, and Zijin Mining, and it is expected that the mining market will become an important contribution to the company's goal of 10 billion yuan.

Benchmark industry benchmark Epiroc, dig deep into the aftermarket and overseas markets

In the aftermarket field, Epiroc, a benchmark enterprise in the company's industry, will achieve aftermarket revenue of 28 billion yuan in 2023, accounting for 68% of the total revenue, opening up the post-market-oriented business model. At present, Wuxin Tunnel has more than 50 service outlets at home and abroad, and the company has set up an aftermarket team for the aftermarket. In terms of overseas markets, the company follows central and state-owned enterprises and participates in the construction of multinational projects such as the Jakarta-Bandung high-speed railway. At the same time, the company has continuously improved its brand influence and actively expanded overseas markets by setting up wholly-owned subsidiaries in Singapore and other countries, which is still in the early stage of development. Analyst:

诸海滨：S0790522080007

Zhao Hao: S0790522080002 report date: July 1, 2024

Risk warning: the risk of the company's new customer development, the risk of raw material price fluctuations, and the risk of industry economic fluctuations

1. Five new tunnels: "little giants" of intelligent equipment for tunnel construction and mining

Founded in 2010, Wuxin Tunnel Equipment Co., Ltd. belongs to the special equipment manufacturing industry, the company focuses on providing complete sets of intelligent equipment and services for "tunnel construction and mining", and is deeply engaged in railways, highways, water conservancy and hydropower, mining and other fields.

1.1. Equity structure: the actual controller is Wang Xincheng, and the controlling shareholder is Wuxin Investment

From the perspective of the company's equity structure, the actual controller is Wang Xincheng, and the controlling shareholder is Hunan Wuxin Investment Co., Ltd. As of the end of 2023, Hunan Wuxin Investment Co., Ltd. (Wuxin Investment) holds 31,612,223 shares of the company, accounting for 35.12% of the shares, and is the controlling shareholder of the company. Hunan China Railway Wuxin Heavy Industry Co., Ltd. (Wuxin Heavy Industry) holds a total of 7,142,857 shares, accounting for 7.94%. Wang Xincheng, the actual controller of Wuxin Tunnel, controls 43.06% of the company's equity through Wuxin Investment (35.12%) and Wuxin Heavy Industry (7.94%), with a total of 38,755,080 shares.

1.2. Product business: including tunnel products, mining products, rock drills (parts) and services

The company's main products include tunnel products, mining products, rock drills (parts), and provide leasing services and after-sales service. The company's tunnel products have been updated many times, and a new tunnel construction scheme has been launched - excavation three-piece set (hyperboloid drilling trolley, vertical arch charge trolley, concrete wet spraying machine), providing complete sets of intelligent equipment for drilling and blasting tunnel construction, including rock drilling trolley, concrete wet spraying machine, bolting trolley, vertical arch charge trolley, tunnel lining trolley, waterproof plate/steel bar operation trolley, maintenance trolley and remote operating system.

(1) The drilling rig is mainly used in the drilling construction of blasting holes. Each blasting of the tunnel section requires more than 200 holes to be drilled in the section, and the footage of one blasting can range from 0.5 meters to 2 meters. Under the traditional blasting drilling operation mode, nearly 10 people are required to erect the construction, and the hand-held air gun drilling is formed, which is easier to drill the blasting hole, resulting in over-excavation or under-excavation of the tunnel section, and the safety risk is greater, and it is also easy to cause the process to take a long time in the tunnel operation cycle and delay the construction period. The rock drilling rig produced by the company can be automatically positioned, use hydraulic force to quickly drill and form, and operate with two arms/three arms at the same time, which can greatly improve construction efficiency and safety.

(2) Concrete wet spraying machine/group is a large-scale high-end concrete spraying equipment with self-propelled function combining pumping and pneumatic. It is mainly used in the initial support after tunnel excavation, using the operation manipulator and concrete spraying system, through the remote control operation of the operator, the special concrete mixed with the quick-setting agent is sprayed to the newly excavated tunnel wall through high pressure, and quickly solidified to prevent tunnel collapse and water seepage, and protect the smooth implementation of tunnel construction. The company's concrete wet spraying machine/group is composed of complex systems such as manipulator system, control system, pumping system, quick-setting agent blending system, air pressure system, power system, bearing chassis, etc., integrating high-end technologies such as mechanical design and manufacturing technology, electrical and intelligent control technology, hydraulic control technology, etc., and is an intelligent integrated product with multi-system and multi-interface management.

(3) The bolting trolley is a self-moving equipment that drills the bolt hole in the roof or side of the underground roadway and completes the partial or full installation of the bolt process. The bolting trolley is composed of chassis, motor, oil pump, water tank, oil tank, oil pipeline, control system, installation equipment and other parts, which can be widely used in mines, subways, water conservancy and other projects.

(4) The company's vertical arch charge trolley includes three models: HLG312E, HLC212 and HLC312. Vertical arch charge trolley HLC212 and HLC312 can be used for the installation of steel arch (including section steel arch and grid arch) in the construction of tunnel full section and step method, reinforcement mesh laying and quality inspection, feng shui pipe installation, defect repair, grouting and other aerial work platforms. The vertical arch charge trolley integrates a variety of high-altitude operations such as arch installation, reinforcement mesh laying, blasting charge, etc., and can be applied to the multi-arch prefabricated segmentation, multi-arch prefabricated folding and single arch folding operation scheme of highway, railway full-section method and step method.

(5) The tunnel (tunnel) lining trolley is mainly used in the secondary lining of the inner wall of the tunnel, and the inner wall surface of the tunnel is formed after the secondary lining is formed, which is put into use (an important stressed part of the tunnel closed loop), and the tunnel (tunnel) lining trolley contains a centralized control system, which has the functions of automatic positioning, automatic detachment, and automatic walking, and can complete the construction operation with high efficiency. In October 2022, the company's "tunnel (tunnel) lining trolley" was awarded the seventh batch of national manufacturing single champion products; The product is the company's flagship product, which has reached the international advanced level by the China Construction Machinery Industry Association in 2023, and some technologies have reached the international leading level.

(6) The waterproof board operation trolley is mainly used in the laying of tunnel waterproof cloth, which is located between shotcrete and secondary lined concrete, and its function is to prevent the water in the mountain from seeping into the tunnel. The waterproof plate operation trolley can automatically walk on the track, and the laying of the waterproof cloth can be efficiently completed by using the operation boom device, replacing the previous manual operation.

(7) The company provides two kinds of maintenance trolleys: digital maintenance trolley SYT12 and digital maintenance trolley SYG12, which are suitable for concrete curing after secondary lining in double-track railway, double-track highway, single-track railway and three-lane highway tunnels, with the advantages of automatic maintenance and multi-function of one machine.

The company's mining products include intelligent tunneling drill rigs, scrapers, pry trolleys, mining bolting rigs, and mining hydraulic tunneling rigs, covering operating sections from 4 square meters to 195 square meters.

(1) The intelligent roadheader provided by the company includes the intelligent roadheader WD581, the lithium-ion version of the intelligent roadheader EWD561, the intelligent roadheader WD561 and other types, which are tailored for the excavation of small and medium-sized roadways in non-coal mines, and completely solve the industry pain points of mechanized construction of small and medium-sized roadways below 3×3M in mines.

(2) The scraper is a kind of shoveling machinery that uses a bucket to shovel the soil and loads the crushed soil into the bucket for transportation, which can complete the comprehensive operation of shoveling, loading, transporting, unloading and layered filling, and local compaction. The scrapers provided by the company include two types: electric scraper DC-1 and diesel scraper YC-1.

(3) In the cycle of underground mine mining operations, the roof and two gangs of the operation site must be cleared of broken and unstable pumice after blasting to ensure the safety of on-site operators and equipment, and the pry trolley can be used to remove pumice. Wuxin Tunnel provides QT650 pry trolley, which is suitable for pry operation of various underground metal mine roadways and underground projects of 4 square meters to 36 square meters.

(4) For the field of mining, the company provides mining bolting trolley MT571, which is suitable for non-coal mines, water conservancy and hydropower roadways with a section of 9-36m², with a minimum working section of 3.2m×3.2m, and a maximum working section of 6.4m×6.3m.

(5) The company's hydraulic tunneling drill rig includes a type of two-arm mining hydraulic boring rig WD582. The two-arm mining hydraulic tunneling drill rig WD582 is suitable for 8m²-45m² mine roadway, water conservancy and hydropower, highway and railway, underground cavern, tunnel boring operation, with a minimum working section of 3m×3m, a maximum working section of 8.7m×6.3m.

In addition to the above tunnel products and mining products, Wuxin Tunnel also provides U1838ME rock drills. As one of the important engineering equipment, hydraulic rock drill is indispensable in the construction of mines, highways, hydropower, railways, construction and other fields, and is a tool used to directly mine stones. In addition, the rock drill can be converted into a disruptor to crush hard layers such as concrete.

From the perspective of technical routes, the main raw materials required for the production of the company's products include four categories: steel, steel structural parts, hydraulic parts and their accessories, and automobile chassis. The processing and transformation method is: the steel raw materials are cut, sawing, shearing, cutting, drilling, cutting and other blanking and machining operations through laser cutting machines, shearing machines, sawing machines, bending machines, bending machines, sawing machines, bending machines, bending machines, drilling machines, cutting and other blanking and machining operations to form steel structural parts. The self-produced and purchased steel structural parts, hydraulic parts and their accessories, automobile chassis and other raw materials are riveted and welded, sprayed and assembled, and finally formed the company's products.

At present, the company's tunnel intelligent equipment products will achieve revenue of 897 million yuan in 2023, accounting for 94.00% of the company's total revenue, and the gross profit margin will be 35.90%. From 2021 to 2023, the revenue of tunnel intelligent equipment products will be 656 million yuan, 506 million yuan, and 897 million yuan respectively, accounting for 95.00%, 93.51%, and 94.00% of the revenue, respectively, all of which exceed 93%, which is the main source of revenue for Wuxin Tunnel Installation. The revenue of other products and services from 2021 to 2023 will be 27.5131 million yuan, 26.6505 million yuan, and 35.6223 million yuan respectively. In 2023, the operating lease business will achieve revenue of 21.5881 million yuan. In 2023, the gross profit margin of the company's tunnel intelligent equipment products and other products and services will be 35.90% and 59.47% respectively, compared with 30.15% and 49.17% in 2021.

On the basis of product sales, Wuxin Tunnel Equipment actively expands the tunnel intelligent equipment leasing business. In 2020, the company's leasing income amounted to 6.1983 million yuan, a significant increase from 3.9826 million yuan in 2018, with a CAGR of 24.75%. Among them, the company's main leasing customers are China Railway Co., Ltd., China Communications Construction Co., Ltd., China Railway Construction Co., Ltd. and other companies.

From the point of view of sales methods, the company's business is mainly obtained through the bidding of various projects and the promotion of direct sales, using the sales model of "direct sales as the mainstay, agent as the supplement", and the downstream customers are mainly railway, highway, water conservancy and hydropower, municipal engineering and other tunnel (tunnel) engineering construction enterprises. From 2021 to 2023, the company's top five customers accounted for 48.91%, 52.57% and 47.00% of sales revenue respectively, with a high degree of customer concentration.

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【Depth】Wuxin Tunnel Installation 835174: "Little Giant" of Intelligent Equipment for Tunnel Construction and Mining, Aftermarket Opens Business Ceiling--Open Source Beijing Stock Exchange

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