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Longde Shipbuilding soared 190% on the first day of listing! Legal person: Huge orders in hand, target price of 94 yuan to buy

Longde Shipbuilding was listed at a reference price of 30 yuan today. On the first day, the honeymoon market was staged. The intraday high reached 90.6 yuan, and the final closed at 87.1 yuan, a surge of 190%. The legal person is optimistic that the amount of orders in hand will remain high, and long-term operations will benefit The market size of patrol boats has grown. We give a “buy” rating and call out a target price of 94 yuan. 

According to the legal person, patrol boats have been actively developed by Longde Shipbuilding in recent years. According to estimates by the research and research institution Maria Research, the CAGR of the global patrol boat market will be 6.21% from 2022 to 2028, and Longde Shipbuilding is expected to benefit. In the annual budget, the Ministry of National Defense is in charge of 415.1 billion yuan, and the focus of the budget will continue to promote “national manufacturing of aircraft and ships.”

The legal person pointed out that Longde Shipbuilding will benefit from the continuous growth of the national defense budget and the compilation of special regulations in the long run, and Longde Shipbuilding has an order of about 10 billion yuan in hand. Considering the huge amount of orders in hand, the sixth factory of Suao Port has been completed and joined in mass production. Queue has increased its production capacity, and the effect of production expansion has appeared. The long-term revenue momentum is expected to be good, which is beneficial to the increase in the price-to-earnings ratio.

The legal person stated that Longde’s competitive advantage lies in the business model of building and repairing, which has high technology content and avoids adopting low-price competition to mark the market. Moreover, Longde Shipbuilding provides after-sales maintenance services throughout the life of the ship, which is better than simply engaging in The shipyard for ship maintenance has a better understanding of the maintenance required for the structure and performance of the hull, which has become the long-term business development direction of Longde Shipbuilding.

The legal person added that Longde Shipbuilding has about 10 billion yuan in ship orders, including 6 high-efficiency ships (Tajiang class) from the Chinese Academy of Sciences, and 1 ship has been delivered so far. It is estimated that the peak revenue of this case will fall in 2023. As for potential orders, the Navy’s second batch of high-efficiency warships was opened in March, with a construction budget of about 9.07 billion yuan. If the bid is successful, it will be implemented until 2026, which is expected to become a growth driver in the next few years. 

The legal person emphasizes that since the Russo-Ukraine War started, investment in national defense, security, and armaments and weapons by countries around the world has only increased. However, Taiwan’s national shipbuilding business opportunities are only shared by Longde Shipbuilding, CITIC Shipbuilding, and Taiwan Shipbuilding. Longde Shipbuilding therefore Benefited, so give a “buy” rating and call out a target price of 94 yuan. 

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