\u3000\u3000 Sinomach Precision Industry Co.Ltd(002046) (002046)
Event:
The company released the performance forecast for 2021, and it is expected to realize a net profit of about 120-160 million yuan, a year-on-year increase of + 92.71% – 156.95%. Q4 is expected to lose 14-54 million yuan in a single quarter.
Key points of the report:
The performance met expectations and the core business increased significantly
Since 2021, the market demand in the fields of national defense and military industry, civil products bearings and chip processing has been strong, the company’s core business has achieved good development, and the bearing business and superhard material products business have increased significantly, driving the overall performance to rise. The total net profit attributable to the parent company in the first three quarters is about 174 million yuan. According to the performance forecast, Q4 is expected to lose 14-54 million yuan in a single quarter; Since the fourth quarter, the company’s operation has remained at a good level due to adverse factors such as power restriction, shutdown and epidemic situation. We judge that the performance loss is mainly due to more impairment accrued in the fourth quarter.
Looking forward to the future, the company has a full focus on military bearing, semiconductor business and diamond cultivation business
(1) axis Research Institute occupies a monopoly position in the field of aerospace special bearings and is applied to satellite, launch vehicle and other spacecraft fields. With the development of China’s national defense and military industry, the company’s special bearing business has increased significantly. (2) The company’s semiconductor grinding wheel and dicing knife break the import substitution by virtue of the advantages of product quality and cost performance. Its customers mainly include Tianshui Huatian Technology Co.Ltd(002185) , Jcet Group Co.Ltd(600584) , Tongfu Microelectronics Co.Ltd(002156) , rimoonlight, Semiconductor Manufacturing International Corporation(688981) subsidiaries, etc. this market is mainly monopolized by disco of Japan. At present, the company’s volume is still very small, and high growth can be expected in the next few years. (3) There are two types of business related to diamond cultivation in Sanmo Institute. One is the external sales of hexahedral top press equipment. At present, the annual production capacity of the company’s hexahedral top press is about 200-300, and the production capacity is in short supply. Second, the company plans to expand MPCVD equipment to more than 80 units by the end of the year. The company is positioned at large particles of more than 3 carats and is expected to contribute considerable performance in the future.
The historical burden is gradually cleared away, and the profit is expected to be realized smoothly
The company has two industry-level research institutes, the shaft Research Institute and the third grinding Institute, with leading technical strength and strong endogenous growth. From 2017 to 2020, the compound growth rate of income of the third grinding Institute and the shaft Research Institute was 18.87% and 28.34% respectively. Since 2015, the company’s performance has been affected by non-performing assets. In the future, with the gradual reduction of historical burden, profits are expected to be released smoothly.
Investment advice and profit forecast
It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 159 million yuan, 316 million yuan and 448 million yuan respectively, corresponding to the current PE of 49 / 25 / 17x respectively, maintaining the “buy” rating.
Risk tips
(1) the clearing of historical burden is less than expected; (2) The market demand for cultivated diamonds is less than expected; (3) Downstream demand was lower than expected.
