To put it simply, commercial spaceflight is a satellite-rocket-ground station.
Further, the speed of commercial aerospace development actually depends on rockets, which is also the core factor restricting the rapid development of commercial aerospace in the mainland.
As the "heart" of the rocket engine, the turbopump is the core component of the rocket.
In the case of Space-X's Merlin engine, the turbopump is constantly optimized and upgraded to increase the thrust of the engine. From Merlin1A to Merlin1D, the engine thrust has increased from 325KN to 846KN, which is a 2.6-fold increase, which shows the importance of turbopumps.
Specific to the turbine pump, the key components of the turbine pump include induction wheel, centrifugal wheel, turbine, bearing, dynamic seal, etc., and the bearing and dynamic seal are the core and key components of the turbine pump.
The bearing is like a support column to stabilize the shafting system to ensure accurate rotation, and is known as an "industrial joint"; The dynamic seal is like a guardian saint, preventing different media from mixing and ensuring safety.
So, which company has a dominant position in this field?
SINOMACH Seiko's special bearings are mainly used in satellites, aviation, and other military equipment in the fields of armed helicopters, missiles and artillery shells, and in the field of mainland aerospace bearings, SINOMACH Seiko's market share has reached 90%, with an absolute monopoly position.
In recent years, SINOMACH Seiko has also been developing healthily, focusing more on the dual main business of bearings and superhard materials, constantly compressing other businesses, stripping off non-performing assets, and improving the quality of operation.
In 2023, the company's trade business will drop by 49.48%, of which the scale of trade business unrelated to the main business such as photovoltaic and copper will be greatly reduced.
In the first quarter of 2024, the company achieved operating income of 636 million yuan, a year-on-year increase of 3.04%, and net profit attributable to the parent company of 85.5237 million yuan, a year-on-year increase of 14.88%, with stable operation.
The company's profitability is also increasing, and the gross profit margin in the first quarter of 2024 has increased to 36.26%, much higher than that of Aerospace Chenguang, Tianyin Electromechanical, Western Testing Test, Tongguang Cable, Feiwo Technology, Chaojie Shares, Aileda, Shaanxi Huada, Aerospace Intelligent Equipment, etc.
So, why are the bearings of SINOMACH Seiko so strong?
The answer is that with the Axis Research Institute in hand, the endogenous growth is strong.
The main operating body of the company's bearing sector is the Shaft Research Institute and the Shaft Research Institute of Science and Technology, which is the only comprehensive research and development institution in the bearing industry in the mainland.
In the world's first sampling of the far side of the moon on Chang'e-6, the aerospace special bearings of the Axis Research Institute were used in the four scenarios of the collection, and in addition, it also participated in major aerospace projects such as the "Shenzhou" series of manned spacecraft, "Tianwen" 1, and China's space station.
The special bearing revenue of the Shaft Research Institute accounts for more than half of the bearing business of SINOMACH, and the special aviation special is a high-tech and high value-added product, with a high gross profit margin, so it is one of the company's stable sources of profits.
In 2023, the revenue of the bearing business will reach 1.038 billion, a year-on-year increase of 5.53%, and the proportion of revenue of this business will also increase to 37.28%. The gross profit margin of the bearing business also increased to 39.52%, an increase of 1.58% year-on-year.
The mainland satellite application industry has entered a new stage, and the development hotspots such as Beidou application and commercial aerospace have brought new opportunities to the industry, so the development of the company's business is clear and the prospects are broad.
In the future, in addition to special bearings, the company is also vigorously developing wind power bearings and leading the localization process of wind power bearings.
Wind power bearing is the core component of wind power equipment, generally a doubly-fed or semi-direct drive wind turbine is composed of 1 spindle bearing, 3 pitch bearings, 1 yaw bearing, gearbox and motor bearing.
Under the trend of large-scale wind turbines, the proportion of their unit value will continue to increase, and it has strong growth potential. It is estimated that the new market size of wind power bearings is expected to reach 34 billion yuan in 2025.
Among them, the market size of spindle bearings is about 11.63 billion yuan, yaw and pitch bearings are about 13.78 billion yuan, and the market size of gearbox bearings is about 8.56 billion yuan.
In recent years, the company has cooperated with Dongfang Electric to seize the opportunity and successively developed and installed the first 4.5MW/7MW/10MW single-row tapered roller spindle bearing in China.
Now it has realized the batch supply of 5-7MW doubly-fed SRB spindle bearings and semi-direct drive TRB spindle bearings, and customers include Goldwind, Mingyang Intelligence, Sany Renewable Energy, etc.
In the next few years, with the improvement of the demand of the wind power industry and the acceleration of the penetration of spindle bearings and other products, the company's wind power bearing business is expected to achieve rapid development and grow into another pillar business in addition to special bearings in the bearing sector.
In addition, the company's electric spindle, machine tool bearings and other businesses have begun to take shape, as the company gradually promotes the independent and controllable industrial machine industry chain, the company's machine tool business import substitution is also worth looking forward to.
After talking about the shaft research institute, there is also the three grinding institutes.
Sanmo Institute is the main operator of SINOMACH Seiko Abrasives Sector, the only comprehensive research and development institution in the mainland abrasives industry, and the pioneer of China's superhard material industry.
From the simple diamond research and development to the coverage of the whole industrial chain, Sanmo has broken the situation that the mainland's high-end precision superhard material products mainly rely on imports.
Upstream, the company has the ability to produce six-sided top press with a diameter of 1m and self-developed MPCVD equipment, and its performance has reached the international advanced level.
In the midstream, we have independently developed the preparation and processing technology of MPCVD diamond crystals, and have built a large-size monocrystalline/polycrystalline diamond production line by MPCVD method.
Downstream, the product has broken the monopoly of foreign sales in the field of high-wear-resistant diamond composite sheet and fine wire drawing field.
It is worth mentioning that Sanmo has many products, and in the field of semiconductors, Sanmo has broken the foreign monopoly in the field of high-efficiency precision machining of chips and accelerated the localization process of semiconductor materials.
With the advantages of quality and cost performance, the products have also been supplied to the leading companies in the field of packaging and testing, such as Huatian Technology, Changdian Technology, Tongfu Microelectronics, ASE Group, SMIC, etc., and the revenue has grown rapidly.
Overall, the overall revenue of this business segment is still very stable.
In 2023, the superhard material business (abrasives) will achieve revenue of 1.004 billion, accounting for 36.07% of the total operating income. Among them, the operating income of superhard abrasives was 481 million, a year-on-year increase of 23.28%, and the operating income of new materials was 255 million, a year-on-year increase of 7.4%.
To sum up, SINOMACH Seiko has a very high market position in the special bearing and superhard material industries.
Among them, aerospace special bearings are in a domestic monopoly position, benefiting from the vigorous development of aerospace, special bearings are expected to grow steadily, at the same time, the certainty of the steady growth of superhard materials is also very high, and the profitability generally maintains a high level, with high growth.
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Source: Flying Whale Investment Research