The scale of the global cutting tool market exceeds 240 billion, and the scale of the Chinese market ranks second, with more than 42 billion. According to QY research, in 2020, the global cutting tool market exceeded US $37 billion (more than 240 billion yuan), and the CAGR from 2016 to 2020 was 2.8%. In terms of consumption market, Europe and China are the largest tool consumption markets, accounting for about 23% and 17% respectively, followed by Japan and the United States, accounting for 12% and 7% respectively. Among them, the scale of China's cutting tool market will be 42.1 billion yuan in 2020. If the compound growth rate is conservatively assumed to be 3%, the scale of China's cutting tool consumption will reach 48.8 billion yuan in 2025.
The market share of cemented carbide tools and medium and high-end tools will increase steadily. Cutting tool materials mainly include high-speed steel, cemented carbide, ceramics and superhard cutting tools. Cemented carbide has excellent performance and has the highest market share. China's application accounts for about 53%, the world accounts for about 63% and developed countries account for more than 70%. With the continuous improvement of cemented carbide performance and the application of coating technology, its application share will increase steadily. It is expected that the market scale of China will reach 29.3 billion yuan and 35.4 billion yuan respectively in 2025 and 2030. With the upgrading of manufacturing industry, the penetration of CNC metal cutting machine tools and the transformation of user thinking, it is expected that the demand for medium and high-end tools will gradually increase, and the market scale will increase from 21.1 billion yuan in 2020 to 33.9 billion yuan in 2030.
Stock substitution + incremental substitution, with domestic substitution space exceeding 26 billion. At present, in the medium and high-end market accounting for about 50%, overseas brands such as Europe, America, Japan and South Korea dominate, accounting for more than 60%. Covid-19 epidemic reduces the supply of foreign brands, improves the quality and production of domestic cutting tools, increases effective supply, industrial chain safety, reduces production costs and increases the demand for domestic cutting tools. We believe that domestic substitution includes stock substitution and incremental substitution. The growth space of domestic medium and high-end cutting tools can be increased from 8 billion in 2020 to 26.1 billion in 2030; The growth space of domestic cemented carbide cutting tools can be increased from 13.3 billion in 2020 to 29.2 billion in 2030, with broad growth space.
Providing overall solutions is the only way for modern knife enterprises to become bigger and stronger. Chinese knife enterprises are taking action. The advantage of the overall solution is to improve the production efficiency of customers, and then reduce the comprehensive production cost of customers, which determines the competitiveness of modern tool enterprises. Providing an overall solution requires the tool manufacturer to have excellent product performance and rich product categories. China's leading cutting tool enterprises have the enterprising spirit to challenge high-end cutting tool brands, pay attention to experience accumulation, force process improvement by expanding direct sales customers and enhancing product testing ability, actively expand product types, and strive to transform to overall solution suppliers.
Investment suggestions: recommend China Tungsten And Hightech Materials Co.Ltd(000657) ( China Tungsten And Hightech Materials Co.Ltd(000657) ), Oke Precision Cutting Tools Co.Ltd(688308) ( Oke Precision Cutting Tools Co.Ltd(688308) ), Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ( Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ); Focus on Shareate Tools Ltd(688257) ( Shareate Tools Ltd(688257) ), Beijing Worldia Diamond Tools Co.Ltd(688028) ( Beijing Worldia Diamond Tools Co.Ltd(688028) ), Est Tools Co.Ltd(300488) ( Est Tools Co.Ltd(300488) ), Sf Diamond Co.Ltd(300179) ( Sf Diamond Co.Ltd(300179) ).
Risk tip: manufacturing investment has fallen sharply, capacity expansion is lower than expected, and the industry competition pattern has deteriorated.
