\u3000\u3000 Shareate Tools Ltd(688257) (688257)
Key investment points
The performance is slightly lower than the market expectation, which is mainly affected by non recurring factors
The company issued a performance express. In 2021, it achieved a revenue of 894 million yuan (year-on-year + 22.5%), a net profit attributable to the parent company of 136 million yuan (year-on-year + 19.3%), and a net profit attributable to the parent company of 122 million yuan (year-on-year + 10.9%) after deduction. Among them, Q4's single quarter revenue was 227 million yuan (year-on-year + 12.3%), the net profit attributable to the parent was 34.29 million yuan (year-on-year + 4.6%), and the net profit attributable to the parent after deduction was 24.69 million yuan.
The original wind unanimously expected that the net profit attributable to the parent company in 2021 was about 150 million yuan, which was actually about 14 million yuan lower than expected. We judged that the main reasons were: (1) 2021q4 company relocated the cemented carbide production capacity, superimposed power restriction and other factors, and the actual shipment and income were slightly lower than expected. (2) 2021q4 exchange rate fluctuates greatly, and the company's overseas revenue accounts for a high proportion of total revenue. Therefore, exchange rate fluctuations have a great impact on profits. Up to now, the company's product prices have made corresponding price increase measures for exchange rate changes, so we judge that the impact of exchange rate on the company's profit margin will be significantly reduced in 2022. (3) 2021q4 company achieved IPO listing, which had an impact on relevant issuance expenses.
Mining cemented carbide leader with global competitiveness, capacity expansion + business expansion can be expected
The company is the leader of mining cemented carbide in China, and its core product mining cone bit has reached the world advanced level. China is far ahead. It has the top three share in overseas South America, Australia and other regions, and has entered the supply system of the top four iron ore groups, competing directly with the global leader Sandvik and so on.
The periodicity of the industry is weak: the cone bit is a consumable and needs to be replaced when it reaches a certain number of meters in the mining process, which is positively related to the mining volume of ore. in the past 10 years, the mining volume of global iron ore has increased positively, and there has been no obvious fluctuation due to the price change of bulk commodities or economic fluctuation, Therefore, the annual demand of the corresponding cone bit is stable and the periodicity is weak.
(1) capacity expansion: the company's cone bit capacity will increase from 34000 sets by the end of 2021 to 70000 sets by the end of 2023. BHP Billiton, Rio Tinto and other key customers as well as Africa, India and other regions are expected to further expand; (2) New products & new fields: the company will expand new impactor and top hammer drilling tools on the basis of cone bit; At the same time, it will also expand the lateral application of cone bit in infrastructure and petroleum fields; (3) Business development: the company plans to acquire the CNC tool business of Zhuzhou Weikai layout. In the future, it is expected to follow the growth path of Sandvik's independent research and development + epitaxial acquisition, develop into the leader of cemented carbide tools in China, and gradually expand overseas.
Profit forecast and investment rating:
2022q1 company's order scheduling continues to operate at full capacity. We judge that the impact of non recurring factors in 2021q4 has been basically eliminated, so we maintain the previous profit forecast of the company. It is estimated that the net profit from 2022 to 2023 will be 238 / 314 million yuan respectively, and the current share price corresponds to 22 / 17 times of PE respectively. We give a target valuation of 40 times of PE in 2022, corresponding to a market value of 9.5 billion yuan, Maintain the "overweight" rating, and it is recommended to focus on it.
Risk warning: the downstream demand is less than expected, the overseas market is uncontrollable, and the price fluctuation risk of raw materials
