\u3000\u3 Guocheng Mining Co.Ltd(000688) 305 Kede Numerical Control Co.Ltd(688305) )
Event: the company released its 2021 annual report. The company achieved an operating revenue of 254 million yuan, a year-on-year increase of + 27.99%, and a net profit attributable to the parent company of 728669 million yuan, a year-on-year increase of + 106.81%.
Downstream demand is strong, and the company's performance meets expectations: in 2021, the company achieved an operating revenue of 254 million yuan, a year-on-year increase of + 27.99%, and a net profit attributable to the parent company of 728669 million yuan, a year-on-year increase of + 106.81%. As a leading five axis CNC machine tool enterprise in China, the company's products are divided into four general-purpose models and two special machines. The product breakdown categories can meet the efficient processing of parts and components of multiple industries and sizes. The company produced 158 sets of complete machines, with a year-on-year increase of 56.44%. In 2021, the business income of high-end CNC machine tools was 233 million yuan, accounting for 92.03%, with a year-on-year increase of + 35.88%. The civil sector expanded smoothly, with 332 million yuan of new orders received in 2021, a year-on-year increase of + 41.79%, of which more than 50% were new orders in non aerospace fields.
During the period, the expense rate is reduced and the profitability is enhanced. In 2021, the company's expense ratio was 18.94%, with a year-on-year increase of -5.85pct, mainly due to the reduction of R & D expenses. There are two reasons for the decrease of the company's R & D expenses: first, the national major special subsidy funds for science and technology offset the current R & D expenses; Second, the company's R & D expenses are ahead of schedule. At present, the R & D projects have entered the harvest period. The comprehensive gross profit margin was 43.14%, year-on-year + 0.99pct, and the net profit margin reached 28.72%, year-on-year + 11.02pct, mainly because the company received government subsidies. In the future, with the release of production capacity, the scale effect will reduce the period cost rate, and the profitability of the company will be gradually enhanced.
The core technology is independent and controllable, and the domestic replacement of high-end machine tools is in progress. Five axis CNC machine tool is the only means to solve the cutting of key industrial products such as aerospace engine impeller, blade disc, blade and marine propeller. It is the infrastructure of high-end manufacturing industry. At present, the localization rate of China's high-end CNC machine tools is still less than 10%. The West imposes restrictions on China in the field of high-end machine tool parts. It is increasingly urgent for high-end machine tools to be controlled independently, and there is a broad space for domestic substitution. More than 85% of the key parts of the company's high-end five axis CNC machine tool products are independently developed and master the core technology. In addition, the company also undertakes a number of national important topics, and the technical strength of high-end CNC machine tools is at the leading level in China.
The expansion of production capacity has been steadily promoted, and the supply capacity will be improved in the future. The company completed the expansion of the production site at the end of 2020, and the plant area was expanded from 10000 square meters to 40000 square meters. In 2021, the construction of capacity improvement was accelerated, and key equipment such as SMT Mounter production line, motor automation production line, multiple precision cylindrical grinding machines and CNC lathes were purchased; Yinchuan base has established a production base of motorized spindles, which is expected to have an annual output of 400. The company is steadily advancing towards the capacity growth target of adding 100 units a year.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 103 / 153 / 201 million yuan respectively, and the corresponding PE of the current stock price is 70 / 47 / 36 times. The company is a scarce five axis CNC machine tool leading enterprise in China. The gradual release of production capacity will bring large performance and maintain the "overweight" rating.
Risk warning: the risk of concentration of downstream customers; The risk of capacity expansion falling short of expectations.
