\u3000\u3000 Oke Precision Cutting Tools Co.Ltd(688308) (688308)
Key investment points
Event: the company released] 2021 performance express. In 2021, the company achieved an operating revenue of 990 million yuan, an increase of 41.0% year-on-year; The net profit attributable to the parent company was 220 million yuan, a year-on-year increase of 106.8%. The company's performance has increased rapidly, which is in line with our expectations.
The combination of supply and demand and the upgrading of product structure is the main reason for the rapid growth of the company's performance. In 2021, there was a strong demand for CNC blades and cemented carbide products. The company expanded production capacity and achieved a high year-on-year growth of 41.0%. The company's product structure has been continuously optimized, the production efficiency has been improved, and the gross profit margin of products has been gradually increased; In addition, the company's fine management has achieved remarkable results, the expense rate has decreased, and its profitability has been further enhanced. Therefore, the company's profit growth rate is significantly higher than the revenue growth rate.
Capacity expansion + category expansion continue to improve the ability to provide overall cutting solutions. In 2021, the company's CNC blade production capacity expanded significantly, and the production capacity of 40 million pieces of raised investment projects will be released in an orderly manner. The company has become a leading enterprise in China in the field of CNC blades. At the same time, the company will expand its tool business horizontally to 5 million cermet blades, 3 million integral cemented carbide tools and 200000 sets of CNC tools (cutter head and cutter body), which will enhance the ability of the company to provide overall cutting solutions and lay a foundation for replacing tool products in Japan, South Korea, Europe and the United States.
The supply side and the demand side promote the import substitution of domestic cutting tools at the same time. As consumables in the production process of manufacturing industry, industrial cutting tools have an important impact on the quality and performance of products processed and produced, Oke Precision Cutting Tools Co.Ltd(688308) with the development goal of medium and high-end cutting tools, strive to continuously improve the performance and service capacity of cutting tools, so as to lay the foundation for the import substitution of domestic cutting tools at the production end; In addition, the high price of imported cutting tools also brings great cost pressure to Chinese enterprises. On the basis of improving the performance of Chinese cutting tools, downstream customers also have the demand to reduce their production costs by using domestic cutting tools. Therefore, from the perspective of supply and demand, the import substitution of domestic cutting tools is feasible.
Profit forecast and investment suggestions. Oke Precision Cutting Tools Co.Ltd(688308) is the leading enterprise of CNC cutting tools and the leader of serrated blades. It is estimated that the EPS from 2021 to 2023 will be 2.22 yuan, 2.88 yuan and 4.11 yuan respectively, and the compound growth rate of net profit attributable to the parent company in the next three years will be 56.4%. Give the company 30 times PE in 2022, the target price is 86.40 yuan, and maintain the "buy" rating.
Risk tip: manufacturing investment has fallen sharply; The company's capacity expansion is lower than expected; The competition pattern of the industry has deteriorated.
