\u3000\u3000 Shareate Tools Ltd(688257) (688257)
Event overview
The company issued a performance express. It is expected to realize an operating revenue of 894 million yuan in 2021, with a year-on-year increase of 22.49%; The net profit attributable to the parent company is expected to be 136 million yuan, with a year-on-year increase of 19.31%; The net profit deducted from non parent company was 122 million yuan, with a year-on-year increase of 10.88%. Analysis and judgment:
The performance growth of 21q4 was slightly lower than expected due to multiple factors
The net profit attributable to the parent company in 21q4 was 34 million yuan, with a year-on-year increase of 4.58% and a month on month change of – 2.13%; The net profit deducted from non parent company was 25 million yuan, with a month on month change of – 26.81%. The original expected revenue in 2021 was 903 million yuan, which was actually about 09 million yuan lower than expected. The original expected net profit attributable to the parent company in 2021 was 142 million yuan, which was actually about 06 million yuan lower than expected. The company’s 21q4 performance was lower than expected, which was mainly affected by short-term factors such as cemented carbide plant relocation, power restriction, RMB appreciation and so on.
The raised investment projects are expected to be put into operation in 2022, with strong performance flexibility
The listed investment projects of the company include the construction of cemented carbide products, cone bit, R & D center and other projects. Among them, the construction project of cemented carbide products has been put into operation. After the project is completed, the production capacity of cemented carbide products of the company is expected to increase from 9.1 million tons / year in 2020 to 1600 tons / year; After the cone bit construction project is completed in the future, 20000 cone bits / year will be added. The company’s capacity expansion is expected to solve the capacity bottleneck problem, and there is a strong guarantee for performance growth. In addition, the funds raised by the company will also be used to introduce advanced production equipment and automate the production line, which will help the company further reduce costs and increase efficiency.
Mining cemented carbide is a global leader, and the layout of CNC blade business is expected to open the second growth curve
Focusing on the technical development of cemented carbide, the company has realized the integration of cemented carbide production, cemented carbide tools and mining consumables, a sound industrial chain and prominent advantages of many products. Among them, the market share of rotating teeth, oil diamond composite substrate and other products ranks among the top in China, the market share of cone bit ranks first in China, and the market share of Australia, South America and other regions ranks among the top three. At the same time, the company actively distributes the field of cermet, and continuously upgrades the existing cone bits and other products to improve their application scope and the company’s comprehensive service capacity. The company plans to acquire Zhuzhou Weikai and expand its business to the field of CNC blades. Zhuzhou Weikai is a manufacturer of cemented carbide cutting tools, specializing in the R & D and manufacturing of NC blade matrix materials, groove structure, finishing and surface coating. It has a number of new patents. The service industry covers rail transit, aerospace, automobile and other fields. The layout of NC blade business is expected to open the second growth curve for the company.
Investment suggestion: in combination with the performance express, we lowered the company’s revenue and performance forecast in 2021. The revenue and net profit attributable to the parent company in 2021 were reduced from the previous 903 million yuan and 142 million yuan to 894 million yuan and 136 million yuan respectively, and the corresponding EPS was reduced from the previous 153 yuan to 147 yuan. Maintaining the company’s previous profit forecast from 2022 to 2023 unchanged, it is estimated that the revenue from 2022 to 2023 will be RMB 1.200 billion and RMB 1.554 billion respectively, the net profit attributable to the parent company will be RMB 202 million and RMB 268 million respectively, and the corresponding EPS will be RMB 218 million and RMB 289 million respectively. Based on the closing price of 57.70 yuan on February 15, 2022, the corresponding PE from 2021 to 2023 are 39 times, 26 times and 20 times respectively. We maintain the company’s “overweight” rating.
Risk warning: fluctuation risk of downstream industry; The risk that the company’s product R & D and marketing are not as expected
