Shareate Tools Ltd(688257) (688257)
Shareate Tools Ltd(688257) it is mainly engaged in the R & D, production and sales of cemented carbide and tools. The market share of the fist product roller drill is the first in China, the third in Australia and South America, and the output of cemented carbide is the top ten in China. Relying on products and services such as cone bits, the company has become a supplier of BHP Billiton, Rio Tinto Group, FMG, Vale of Brazil and Chile national copper company. With this leading product, the company has been recognized as the third batch of specialized and new “little giant” enterprises by the Ministry of industry and information technology, and is a typical leading enterprise in the subdivided field of machinery manufacturing.
The annual market space of rock drilling tools exceeds 40 billion. The company has certain technical advantages and market position in the field of rock drilling tools, and will expand new products + new markets + new regions in the future. The company’s flagship product cone bit is a kind of rock drilling tools. The annual market space of rock drilling tools is about 42 billion, and as an industrial consumables, the market demand is stable. As a leading enterprise of rock drilling tools, the technical level of the company has reached a level comparable to that of overseas giants Sandvik and atlas. It is expected to increase the market share and expand new products, new markets and new regions with the expansion of production capacity. It is estimated that the company will have a capacity of 34000 sets of cone bits this year, an additional capacity of 20000 sets will be raised through IPO, and the capacity is expected to reach 70000 sets after the second phase is completed in the future.
The cemented carbide field has a comprehensive layout and diversified development of endogenous epitaxy to create a tool platform. Shareate Tools Ltd(688257) in 2020, the output of cemented carbide will be 910 tons, ranking among the top ten in China. The planned new capacity of IPO raised investment projects will be 1600 tons. With the release of raised investment capacity, the company’s Cemented Carbide market share is expected to further increase. The downstream of the company’s Cemented Carbide involves mining, cutting and wear resistance, with a comprehensive layout. In the future, the company plans to make efforts in the field of cutting tools, improve the bar production capacity, participate in the field of non-standard hard cutting tools, and plans to acquire Zhuzhou Weikai to enter the field of NC blades to build a tool platform enterprise.
Profit forecast and investment suggestions: with the release of the company’s raised and invested capacity, we expect the company to achieve operating revenue of 931 million, 1289 million and 1641 million from 2021 to 2023, with a year-on-year increase of 27%, 39% and 27%, and net profits attributable to the parent company of 158 million, 232 million and 312 million, with a year-on-year increase of 27%, 47% and 34%, corresponding to EPS of 171, 250 and 336 yuan, corresponding to pe34, 23 and 17 times, As a leading company with global competitiveness in subdivided fields, the company will enter the accelerated growth stage with the release of raised investment capacity in the next 2-3 years. It will give the company a target valuation of 30 times PE in 2022, with a corresponding target market value of 7 billion and a target price of 75 yuan, covering the “recommended” investment rating for the first time.
Risk warning: repeated epidemic situation leads to less demand than expected; The pace of production expansion is lower than expected; Increased competition leads to reduced profitability; The extension progress is lower than expected.
