\u3000\u3 Guocheng Mining Co.Ltd(000688) 308 Oke Precision Cutting Tools Co.Ltd(688308) )
Event overview
1. The company released its annual report for 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%.
2. The total amount of funds raised by the company to issue shares to specific objects shall not exceed RMB 80 million (including this amount). After deducting the issuance expenses, it is intended to be used for the CNC Tool Industrial Park project of Zhuzhou Oke Precision Cutting Tools Co.Ltd(688308) cutting tools Co., Ltd. and supplement working capital.
Analysis and judgment:
In the past 21 years, the performance has been brilliant and the profitability has been greatly improved.
1) with the increase of the company's production and sales ratio, the company's revenue and net profit attributable to the parent company will increase significantly by 41.04% and 106.82% respectively in 2021. In terms of profitability, the company's gross profit margin in 2021 was 34.38%, an increase of 2.93 PCT year-on-year. With the gradual emergence of the company's scale effect, the company's management / sales / financial expense ratio decreased by 0.96/0.82/0.75pct year-on-year respectively in 2021, resulting in a significant year-on-year increase in the company's net profit margin by 7.14pct to 22.44%.
2) in a single quarter, the decline in the revenue of cemented carbide products business dragged down the single quarter performance of 2021q4. In 2021q4, the company achieved an operating revenue of 232 million yuan, with a year-on-year increase of 11.96% and a month on month change of - 12.05%; The net profit attributable to the parent company was 52 million yuan, with a year-on-year increase of 75.01% and a month on month change of - 20.92%, which was mainly due to the decrease of gross profit margin by 4.71 PCT to 22.73% in 21q4 due to the rise of raw material prices, which led to the decrease of net profit margin by 2.53 PCT to 22.51% month on month.
The performance of CNC blade is bright, and the cemented carbide products stand firm
1) in 2021, the company's product performance continued to improve and the production capacity was gradually released, and the production and sales volume continued to increase. Among them, the production of cemented carbide products / CNC tool products increased by 23.91% / 45.92% year-on-year to 177790 tons / 809692 million pieces, and the sales volume increased by 24.41% / 43.11% year-on-year to 174788 tons / 771141 million pieces.
2) from the perspective of revenue, the revenue of cemented carbide products / CNC tool products of the company reached 532 / 455 million yuan respectively in 2021, with a year-on-year increase of 34.05% / 50.14% respectively. Among them, the income of NC tool products has increased significantly.
3) from the perspective of profitability, the gross profit margin of cemented carbide products / CNC tool products of the company in 2021 was 24.53% / 45.92% respectively, with a year-on-year increase of 1.77/3.09pct. In the future, with the expansion of the company's NC blade production capacity, it will help to reduce the unit cost and further improve the profitability of the company's products, especially NC blades.
R & D investment continues to increase, and high-end products are expected to gradually increase in volume
In 2021, the company's R & D investment increased by 47.89% year-on-year to 49 million yuan, and the R & D expense rate increased by 0.51 PCT year-on-year to 4.95%. The company attaches importance to the R & D product reserve, adding nearly 2000 kinds of CNC blade products. At the same time, the company has increased the R & D reserve of high-end products. Among the new product varieties, the price of more than 10 yuan accounts for more than 40%, which is expected to be further improved in the future.
The NC Tool Industrial Park project helps the company improve the cemented carbide tool industrial chain
The company announced that it plans to raise no more than 800 million yuan for the NC Tool Industrial Park project and supplement working capital. After the completion of the NC Tool Industrial Park project, it can form an annual production capacity of 1000 tons of high-performance bars, 3 million integral cemented carbide tools, 200000 sets of NC tools, 5 million pieces of cermet blades and 10 tons of cermet sawteeth, and is expected to achieve an annual operating income of 584 million yuan, The net profit is about 136 million yuan. This capacity expansion will help the company further optimize the product structure, improve the industrial chain layout, enhance the market share and competitiveness of domestic cutting tools, and enhance profitability.
Investment advice
Maintain the company's profit forecast for 20222023 unchanged and add the profit forecast for 2024. It is estimated that the revenue in 20222024 will be RMB 1.352/18.52/2.426 billion respectively, with a year-on-year growth rate of 36.5% / 37.0% / 31.0%; The net profit attributable to the parent company was 307 / 420 / 570 million yuan respectively, with a year-on-year growth rate of 38.2% / 36.6% / 35.8%, corresponding to EPS of 3.07/4.20/5.70 yuan respectively, corresponding to the closing price of 56.7 yuan / share on March 29, 2022, and PE of 18 / 14 / 10 times respectively, maintaining the "overweight" rating of the company.
Risk tips
Capacity expansion is less than expected; The downstream prosperity is lower than expected; Industry competition intensifies; The progress of this fixed increase is less than expected.
