Market review: the market was anxious this week (2022 / 4 / 252022 / 4 / 29), and the SW mechanical equipment index fell 2.84%, ranking 21st among Shenwan's 31 primary industry categories; The CSI 300 index rose 0.07%.
Core view
In the recent devaluation of the RMB, we should pay attention to the direction of export benefits. Recently, the RMB has continued to weaken against the US dollar, which is conducive to further improving the profitability of companies with strong export competitiveness. It is suggested to focus on three directions: 1) companies with a high proportion of exports, including Junhe Pumps Holding Co.Ltd(603617) , Hangzhou Great Star Industrial Co.Ltd(002444) , Zhejiang Jiecang Linear Motion Technology Co.Ltd(603583) , etc; 2) Due to the rising cost of imported competitive products, it is suggested to focus on Oke Precision Cutting Tools Co.Ltd(688308) , Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ; 3) Chinese enterprises with comparative advantages and increasing proportion of overseas income will also benefit to some extent, such as lithium battery equipment. It is suggested to focus on Wuxi Lead Intelligent Equipment Co.Ltd(300450) , Zhejiang Hangke Technology Incorporated Company(688006) .
Lithium battery equipment: the performance in the first quarter is good, and it is expected to continue to maintain a high outlook in the second quarter Wuxi Lead Intelligent Equipment Co.Ltd(300450) released the first quarter report: the revenue in 2022q1 was 2.926 billion yuan, a year-on-year increase of + 142.41%; The net profit attributable to the parent company was 346 million yuan, a year-on-year increase of + 72.50%. According to the capacity planning of overseas and Chinese head battery enterprises, we expect that the new battery capacity will be about 557, 616, 464 and 663gwh from 2022 to 2025, with a year-on-year growth rate of 65%, 44%, 23% and 27%. In 2021, the amount of Wuxi Lead Intelligent Equipment Co.Ltd(300450) newly signed orders reached 18.7 billion yuan (excluding tax), a year-on-year increase of + 69%, a record high. We judge that the demand for lithium battery equipment is expected to reach a higher level in 2022, and the bidding season will usher in the second quarter. It is suggested to focus on it.
CNC cutting tools: Oke Precision Cutting Tools Co.Ltd(688308) , Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) achieved steady growth in the first quarter and is optimistic about the performance elasticity brought by the annual capacity expansion. Although affected by the epidemic situation, logistics and other factors, Oke Precision Cutting Tools Co.Ltd(688308) , Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) achieved double-digit growth in revenue and profit in the first quarter, and the gross profit margin and net profit margin also remained at a high level. This year, new plants of both companies have been put into operation, and the proportion of high-end products has increased, which is expected to increase both volume and price. We estimate that at present, the localization rate of high-end CNC tools is less than one third, and there is still much room for improvement.
Nuclear power equipment: Sanmen, Haiyang and Lufeng nuclear power projects approved by the national standing committee are expected to drive the demand for nuclear power equipment. According to the calculation of 2 units in each project, it is expected to correspond to 6 new units. We believe that nuclear power construction has entered a benign development stage driven by policies, technologies, carbon neutralization goals and other factors. The construction cost of a single nuclear power unit is about 20 billion, of which equipment accounts for about 50%, and the localization rate of third-generation nuclear power equipment is more than 88%. According to the China nuclear energy development report (2021) issued by China Nuclear Energy Industry Association, the comprehensive localization rate of China's third-generation independent nuclear power has reached more than 88%, forming a supply capacity of 8-10 sets of nuclear power main equipment every year, and the construction capacity is the world's leading. We expect that the localization of China National Nuclear Power Co.Ltd(601985) key equipment is expected to be further accelerated under the background of global pattern changes caused by the conflict between Russia and Ukraine.
Construction machinery: the bottom is gradually approaching, "steady growth" is expected to drive the demand recovery in the second half of the year. According to the data of excavator Association, 26 excavator manufacturers sold 77175 excavators in the first quarter, a year-on-year decrease of 39.2%; Including 51886 sets in China, a year-on-year decrease of 54.3%; 25289 sets were exported, with a year-on-year increase of 88.6%. The epidemic situation and the high base in the first quarter of last year led to a large decline in the industry in the first quarter of this year. We expect that in April, the sales volume of China's excavator market will still decline by more than 50% year-on-year; From May, the sales growth of excavator in China market is expected to gradually stabilize and recover.
Recommended combination: Anhui Yingliu Electromechanical Co.Ltd(603308) , Yantai Jereh Oilfield Services Group Co.Ltd(002353) , Jee Technology Co.Ltd(688162) , Oke Precision Cutting Tools Co.Ltd(688308) , Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) , etc.
Risk warning: macroeconomic change risk; Price fluctuation risk of raw materials; Policy and production expansion are less than expected risks.
