\u3000\u3000 Oke Precision Cutting Tools Co.Ltd(688308) (688308)
Event overview
The company released the performance express of 2021, and achieved an operating revenue of 990 million yuan in 2021, with a year-on-year increase of 41.04%; The net profit attributable to the parent company was 222 million yuan, a year-on-year increase of 106.82%; The net profit deducted from non parent company was 196 million yuan, with a year-on-year increase of 89.88%.
Analysis and judgment:
Multiple factors help the company's performance growth
The net profit attributable to the parent company in 2021q4 was 52 million yuan, with a year-on-year increase of 75.01% and a month on month change of - 20.92%. The main reasons for the sharp increase in the company's performance include:
1) in 2021, the downstream manufacturing industry is booming, the market demand is strong, and the product volume and price increase. Among them, the production capacity of NC cutting tools increased significantly, and the sales volume of cemented carbide products increased, which promoted the scale growth of revenue;
2) the company actively optimizes the product structure, gradually improves the sales channels, continuously improves the production efficiency, promotes the company to realize the double increase of revenue and net profit, and steadily improves the comprehensive gross profit margin;
3) the company implements fine management, takes many measures to reduce the cost rate and further enhances its profitability.
Capacity expansion contributes to continuous improvement of performance
1) the construction project of 40 million pieces of high-end CNC blade intelligent manufacturing base invested by the company is expected to gradually release the production capacity. As the new energy production capacity gradually climbs, we expect the annual sales volume of the company to be around 100 million pieces in 2022.
2) the company announced in November 2021 that it plans to invest 750 million yuan to build a CNC Tool Industrial Park, and plans to build an annual output of 1000 tons of high-performance bars, 3 million integral cemented carbide tools, 200000 sets of CNC tools, 5 million pieces of cermet blades and 10 tons of cermet saw tooth production line. This capacity expansion will help the company further optimize the product structure, improve the industrial chain layout, improve the market share and voice of domestic cutting tools, and enhance profitability.
The demand for domestic CNC cutting tools is strong, and the import substitution is accelerated to create favorable conditions
1) the consumption scale of cutting tools in China is about 40 billion yuan, and the market space is huge. With the development of manufacturing industry towards automation and intelligence, as the leading cutting tool of digital manufacturing, the demand for cemented carbide cutting tools is expected to further increase in the future.
2) domestic cutting tools are mainly medium and low-end products. Chinese high-quality cutting tool manufacturers are expected to continue to benefit from the impact of covid-19 epidemic on overseas cutting tool manufacturers and the progress of Chinese technology. In terms of blades, the company has accumulated a large number of independent R & D technologies, leading the core technology industry, and the performance indicators of some products are close to those of similar products of foreign manufacturers such as Senla Tianshi. With the expansion of product categories by raised investment projects, the company is expected to increase the proportion of high-end products, improve market share and enhance comprehensive competitiveness and profitability.
Investment suggestion: according to the performance express, we lowered the company's revenue forecast of 1.068 billion yuan in 2021 to 990 million yuan, and the net profit attributable to the parent company was basically consistent with our previous forecast. The net profit attributable to the parent company in 2021 was adjusted to 222 million yuan (previously 223 million yuan). Maintain the company's previous profit forecast from 2022 to 2023 unchanged. It is estimated that the revenue from 2022 to 2023 will be 1.352/1.852 billion yuan and the net profit attributable to the parent company will be 307/420 million yuan respectively. From 2021 to 2023, the corresponding EPS is 2.22 yuan, 3.07 yuan and 4.20 yuan respectively. Based on the closing price of 58.10 yuan on February 22, 2022, the corresponding PE is 26 / 19 / 14 times respectively. We maintain the "overweight" rating.
Risk tip: the price increase is less than expected, the capacity expansion is less than expected, and the prosperity of downstream industries is less than expected.
