\u3000\u3 Guocheng Mining Co.Ltd(000688) 308 Oke Precision Cutting Tools Co.Ltd(688308) )
Event: the company issued the 2022 restricted stock incentive plan (Draft), which plans to grant 2 million restricted shares to 172 core employees, accounting for 2.0% of the total share capital of the company. 1.69 million shares were granted for the first time and 310000 shares were reserved.
Equity incentive stimulates the enthusiasm of core employees and helps the long-term development of the company. The number of equity incentive objects is up to 172, accounting for 18.5% of the total number of the company, with a wide incentive range. The ownership conditions of this incentive stock are: Based on the deduction of non net profit in 2021, the growth rate of deduction of non net profit in 2022, 2023 and 2024 shall not be less than 20% / 40% and 60% respectively. Equity incentive can stabilize the company’s talent team and stimulate the subjective initiative and creativity of core employees, which is conducive to the company’s sustainable development and long-term competitiveness.
The company is committed to providing overall cutting solutions and promoting domestic substitution of industrial cutting tools. The company issued a fixed increase plan in the early stage, and plans to raise 800 million yuan, which is mainly used for the construction of NC Tool Industrial Park. It will increase the 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 sawtooth. In 2021, the company sold 77.11 million NC blades, with a year-on-year increase of 43.1%. After the completion of the NC Tool Industrial Park project, the company will realize the transformation from blade manufacturer to overall cutting solution supplier, and continue to promote the domestic substitution of industrial tools.
Three factors accelerate the domestic substitution of industrial cutting tools. 1) Covid-19 epidemic reduces the supply of foreign brand cutting tools: covid-19 epidemic hinders the production of overseas cutting tools and reduces the output. At the same time, it is inconvenient for maritime transportation and increases the transportation cost, resulting in the reduction of the supply of imported cutting tools; 2) Improve the quality and expand the production of domestic cutting tools and increase the effective supply: Oke Precision Cutting Tools Co.Ltd(688308) and other leading Chinese cutting tool enterprises strive to improve the product quality, greatly expand the production capacity of NC blades (the production capacity is increased by nearly 50%), and the effective supply of domestic cutting tools is increased; 3) Ensure the safety of the manufacturing industry chain, reduce the production costs of downstream customers, and increase the demand for domestic cutting tools: as the basic tool of the manufacturing industry, industrial cutting tools play an important role in the industrial chain. The independent control of medium and high-end cutting tools is an important guarantee for the safety of the manufacturing industry chain; In addition, with the progress of domestic tools, downstream customers have the demand to reduce costs by using domestic tools.
Profit forecast and investment suggestions. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 290 million yuan, 410 million yuan and 530 million yuan respectively, and the compound growth rate of net profit attributable to the parent company in the next three years will be 33.9%. Considering the high barriers in the NC tool industry, the acceleration of domestic substitution and the high certainty of the company’s performance, the company gave 30 times PE in 2022, the target price was 86.40 yuan, and maintained the “buy” rating.
Risk tip: manufacturing investment has fallen sharply; The company’s capacity expansion is lower than expected; The industry competition pattern has deteriorated.
