\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 57 China Tungsten And Hightech Materials Co.Ltd(000657) )
Event overview
The company released the performance express for 2021. In 2021, the company achieved an operating revenue of 12.094 billion yuan, a year-on-year increase of 21.92%, a net profit attributable to the parent of 528 million yuan, a year-on-year increase of 138.91%, and a net profit not attributable to the parent of 490 million yuan, a year-on-year increase of 245.07%.
Analysis and judgment:
Excellent performance and significantly improved profitability. In 2021, the company's performance increased significantly year-on-year. The main reasons are as follows: first, the production and sales volume of CNC cutting tools, cemented carbide products and other products increased significantly, driving the steady growth of the company's revenue scale; Second, the profitability of the company's main products has been greatly improved through measures such as optimizing product structure, reducing cost and increasing efficiency and improving service quality.
The production capacity of NC cutting tools has been improved smoothly, and high-end blades are expected to continue in large quantities in the future. According to the survey summary of the company's investors, in 2021, the production capacity of CNC blades of the subsidiary Zhuzhou drilling company exceeded 100 million, and the 10 million blades arranged by the self hardening company have also been put into operation, with a total production capacity of 110 million. In addition, Zhuzhou drilling company has been approved to build two production lines of cutting tools for aerospace and automotive key parts in August 21, which will increase the production capacity of more than 10 million NC blades in total. The company's NC blade production capacity in the 14th five year plan has reached 150200 million pieces, and the company's NC blade business has huge growth space.
The application penetration rate of tungsten wire in photovoltaic field is improved, and actively expanding the production capacity of tungsten wire is expected to open up new growth space. It was announced on February 25, 2022 that the board of directors of the company agreed to raise 97.92 million yuan from Chengdu Branch of self hardening company to build a new high-strength fine tungsten wire production line with an annual output of 10 billion meters, which is mainly used in photovoltaic industry. The construction period of the project is 9 months. According to the public information, fine tungsten wire can upgrade and replace the fine steel wire in some application fields due to its high strength, wear resistance, good machinability and good fatigue resistance, so as to make up for the shortcomings of the fine steel wire, such as it is difficult to process finer and low strength, and because of its excellent machinability and high strength, the tungsten wire has a good cost performance in replacing the fine steel wire in some special fields. At present, tungsten wire for photovoltaic is facing the problem of high cost and has not been applied on a large scale. With the progress of large-scale production and technology, the cost of tungsten wire for photovoltaic is expected to decrease.
Investment advice
According to the performance express, we lowered the company's profit forecast for 2021. In 2021, the company's revenue forecast was lowered from the previous 12.893 billion yuan to 12.094 billion yuan, the net profit attributable to the parent company was lowered from the previous 567 million yuan to 528 million yuan, and the EPS forecast was lowered from the previous 0.53 yuan to 0.49 yuan. Maintaining the company's profit forecast for 20222023, it is estimated that the revenue in 20222023 will be 14.842/17.105 billion yuan respectively, the net profit attributable to the parent company will be 676830 million yuan respectively, and the EPS will be 0.63/0.77 yuan respectively Based on the closing price of 11.66 yuan on March 21, 2022, the corresponding PE from 2021 to 2023 is 24 times, 19 times and 15 times respectively. We maintain the company's "overweight" rating.
Risk tips
Capacity expansion is less than expected; The downstream prosperity is lower than expected; Industry competition intensifies.
