\u3000\u3 Guocheng Mining Co.Ltd(000688) 558 Nantong Guosheng Intelligence Technology Group Co.Ltd(688558) )
Events
The company released the annual report of 2021: the operating revenue was 1.14 billion yuan, a year-on-year increase of 54.5%; The net profit attributable to the parent company was 201 million yuan, a year-on-year increase of 66.7%; The net profit attributable to the parent company after deducting non profits was 178 million yuan, with a year-on-year increase of 69.4%.
Key investment points
The self-made rate of parts has been improved, the revenue has increased, and the R & D expense rate has been maintained
The self-made rate of the company’s core parts has achieved a new breakthrough, and the self-made rate of fully automatic right angle head processed on five sides has been further improved; The self-made rate of spindle of NC boring and milling machine is increased to 80%; Gantry and horizontal motorized spindles are under continuous test; The full gear transmission part of gantry spindle includes gearbox and transmission mechanism, and the design and trial production are completed; The design of high-power boring and milling spindle and high-precision rotating worktable with large load are completed and the trial production of main parts is completed. On the one hand, the improvement of self-made rate of core components will further thicken the gross profit and enhance the competitiveness of products. At the same time, it will increase the product stability and customer service response ability of the whole machine. In 2021, the company invested 58 million yuan in R & D, with a year-on-year increase of 60.9%, and the expense rate increased slightly to 5.09%; During this period, 20 invention patents were newly applied for, and the cumulative number was increased to 34; The average salary of R & D personnel increased by 24% to 195000 yuan. Under the high growth rate of revenue, the R & D expense rate still maintained a certain increase, which shows that the company attaches importance to technology and product power.
The CNC machine tool market has moved from price comparison to quality competition, and the business cycle is expected to resonate with the renewal cycle
In the second half of 2020, the manufacturing boom recovered rapidly, and the export demand increased greatly, driving the willingness of downstream capital expenditure, and the CNC machine tool industry entered a new round of boom cycle. Benefiting from the high boom of the machine tool industry and the demand for import substitution, and the arrival of the superimposed renewal cycle, the cultivation and accumulation of some domestic machine tool enterprises in the industry’s trough period for many years have gradually appeared. In the process of China’s industrial upgrading, higher requirements are put forward for the stability and reliability of medium and high-end machine tools, and the choice of downstream customers has entered a new stage of quality competition from price comparison. At the same time, 5g, rail transit, new energy and other industries in the field of new infrastructure have brought significant increment to the demand for machine tools. The company has advantages in the fields of medium and high-end Lijia, Longmen and five axis machine tools, and is expected to enjoy the dividends brought by the improvement of product strength and brand strength.
Profit forecast
It is estimated that the company’s revenue from 2022 to 2024 will be 1.42 billion yuan, 1.94 billion yuan and 2.59 billion yuan respectively; The net profit attributable to the parent company is 253 million yuan, 364 million yuan and 505 million yuan respectively, and the corresponding dynamic PE of the current stock price is 17, 11 and 8 times respectively. For the first coverage, give a “recommended” rating.
Risk tips
Import substitution progress is lower than expected; The decline of manufacturing boom leads to the decline of demand; Policy support and risk reduction.
