The early recovery of China’s manufacturing industry and the continuous improvement of CNC rate of machine tools, combined with the impact of the epidemic, the production capacity of overseas tool companies is limited, and there is a strong demand for domestic cemented carbide CNC blades. On the afternoon of April 1, at the annual performance presentation of Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ( Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) . SH), Xiao Xukai, chairman of the board of directors of the company, told the associated press that the domestic cutting tools are extended to the high-end market. The annual production capacity of the company in 2021 is 63 million pieces, and new equipment will be added to the existing production line to improve the production capacity. It is expected that the production capacity will be increased slightly in the future; Projects invested with raised funds are still under construction.
The annual report shows that the company achieved an operating revenue of 485 million yuan last year, a year-on-year increase of 55.51%; The net profit attributable to the parent company was 162 million yuan, a year-on-year increase of 82.41%; It is proposed to distribute a cash dividend of 12 yuan (including tax) for every 10 shares. By product, the revenue of turning blades accounted for 67% and the gross profit margin was 47.3% (a year-on-year increase of 1.9 percentage points); The milling blade was 29.6%, and the gross profit margin was 55.86% (a year-on-year decrease of 2.78 percentage points). The comprehensive gross profit margin decreased by 0.42 percentage points year-on-year.
Xiao Xukai said that in 2021, the prices of raw materials such as tungsten carbide and cobalt powder continued to rise, resulting in an increase in unit costs. The company has raised prices for some products in 2021 and 2022. Is there any price increase plan for this year? Xiao Xukai responded that in the future, the company will comprehensively consider the business strategy and market conditions and make a price strategy in time. At the same time, the company will improve its profitability through product structure optimization, technical capacity upgrading and other measures. In 2022, the company will increase the development and promotion of GM groove steel turning tools, new high-efficiency face milling tools and square shoulder milling tools.
According to the online statistics of ferroalloy, the average market price of tungsten powder in China is about 234.21 yuan / kg by 2021, an increase of about 17.83% over the average price of the previous year (198.77 yuan / kg); From January to January this year, the price of tungsten carbide rose from 256 yuan / kg to 276 yuan / kg at the end of March, an increase of about 8%. Cost promotes cemented carbide enterprises to raise prices collectively again on April 1.
Investors are also more concerned about the production expansion progress of Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) raised investment projects and whether the collective production expansion competition in the cutting tool industry is intensified this year. Xiao Xukai said that the raised investment project is still under construction, and there will be a process of capacity release after completion. He believes that the self-sufficiency of China’s CNC cutting tools is gradually increasing, and the speed of import substitution is accelerating. In the future, the competition among tool enterprises will be more intense. The future competition mainly lies in technical competition. Benign competition is conducive to the improvement of tool product performance. At present, the company has made some progress in customer development in the aerospace field.
Although the company did not disclose the specific production schedule of the new capacity, according to the agency’s prediction, the company’s IPO project is expected to start production around September 2022. The reporter noted that in addition to Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) , the net profit of Oke Precision Cutting Tools Co.Ltd(688308) ( Oke Precision Cutting Tools Co.Ltd(688308) . SH) increased by 106.82% year-on-year in 2021 The net profit of China Tungsten And Hightech Materials Co.Ltd(000657) ( China Tungsten And Hightech Materials Co.Ltd(000657) . SZ) is expected to reach more than 470 million yuan, with a year-on-year increase of 112.56%. In recent years, the CNC rate of machine tools in China has continued to increase, from 7.79% in 2000 to 41.11% in 2021, but there is still much room for improvement in the high CNC rate of more developed countries. This year, the pressure on the cost side of raw materials is not reduced. How to expand high-end production capacity as soon as possible has become the starting point of tool companies in 2022.
