\u3000\u3000 Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) (300083)
Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) is the leader of China’s CNC machine tool industry, and the national manufacturing fund will become the shareholder of listed companies. By the end of 2020, the company has basically completed the integration and stripping of precision structural parts business. At present, the CNC machine tool business is the only core business of the company. In the first three quarters of 2021, the company achieved a revenue of 4.118 billion yuan, a year-on-year increase of 66%, and the revenue of high-end machine tools accounted for nearly 100%; In 2021, the net profit attributable to the parent company will be 460-520 million yuan.
The localization rate of China’s high-end machine tool industry has great room to improve. China Business Industry Research Institute predicts that the global CNC machine tool industry will reach US $164.8 billion in 2021; The scale of China’s CNC machine tool industry will reach 371.9 billion yuan in 21 years. The localization rate of high-grade CNC machine tools in 18 years and the CNC rate of metal cutting machine tools in 20 years are only 6% and 43%, which still has great room for improvement. In August 2021, SASAC stressed the need to strengthen key core technology research for industrial motherboards and high-end chips. The global machine tool industry is mainly controlled by Japan, Germany and the United States, Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) as a leading enterprise in China, its business is mainly composed of general machine tools and 3C machine tools, and there will be a huge opportunity to improve its share in the future.
General business: the rapid and large-scale growth of Lijia. In the future, the new energy, electric vehicle and 5g communication industries will drive the rapid growth of lathes, horizontal heaters and Longmen. In 2022, the proportion of machine tools for new energy vehicles in the company’s revenue will reach 10%. In terms of revenue and shipment volume, Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) has ranked first in domestic general-purpose CNC machine tools. The company has doubled its sales volume for four consecutive years, and shipped more than 10000 units in 21 years. The company estimates that the current market demand of China’s vertical machining, lathe, horizontal machining and gantry is about 100000-120000 sets / year, 100000-120000 sets / year, 4000-6000 sets / year and 3000-5000 sets / year. The company extends its product line from vertical to horizontal, lathe and gantry. At present, the unit prices of these four products are about RMB 210000, RMB 320000, RMB 300000 and RMB 920000 respectively. The sales volume of 21h1 Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) vertical heater, horizontal heater and gantry is 4688, 23 and 46 sets. We expect that the sales volume of the company’s general machine tool business in 21-23 years will be 1.19/1.94/28600 sets, and the corresponding revenue will be 2.73/45.9/6.97 billion yuan.
3C business: stock replacement and emerging demand will drive China’s leading drilling machine to maintain steady growth. The cumulative shipment volume of 3C products of the company has exceeded 80000. As a core supplier of North American customers, it has been deeply recognized by Byd Company Limited(002594) , Changying, Lixun, goer and other customers. In terms of market space, considering the annual demand for stock replacement of about 40000 units (smartphones, laptops and tablets) and the annual demand of about 10000 units in emerging markets (VR / AR, wearable, Siasun Robot&Automation Co.Ltd(300024) , e-cigarettes, medical devices and UAVs, etc.), the annual market scale of about 50000 units of RMB 10 billion, we expect the company’s 3C revenue of about RMB 2.39/2.52/2.64 billion in the 21st-23rd year.
Executive buybacks and employee stock ownership plans demonstrate confidence. Mr. Zhou Qichao, Deputy General Manager / Secretary of the company, and the company’s phase I employee stock ownership plan will increase the shares of listed companies by 20-40 million yuan and 400 million yuan respectively.
Earnings forecast, valuation and rating. We predict that the company’s net profit attributable to the parent company from 2021 to 2023 will be 511 million yuan, 929 million yuan and 1.313 billion yuan respectively. At present, the PE corresponding to the market value of about 18.5 billion yuan is 36x / 20x / 14x respectively. Considering the rapid growth of the company in the future and the valuation is lower than that of comparable companies, we will give a “buy” rating for the first time.
Risk tip: market competition intensifies, 3C product business or technology iteration is less than expected, and the reorganization plan is suspended.
