\u3000\u3000 Oke Precision Cutting Tools Co.Ltd(688308) (688308)
Event: the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will be RMB 215-230 million in 2021, with a year-on-year increase of 100.1% – 114.1%; Net profit deducted from non parent company was RMB 185-200 million, with a year-on-year increase of 79.6% – 94.2%. The company’s performance maintained rapid growth, in line with expectations.
The booming supply and demand of CNC blade + cemented carbide products drives the rapid growth of the company’s performance. There are two main reasons why the company’s performance doubled in 2021: 1) the demand for CNC blades and cemented carbide products in the two business segments of the company is very strong, and the company has expanded its production on a large scale to meet the market demand; 2) The proportion of revenue of NC blade business with stronger profitability has increased rapidly, and the gross profit margin of NC blade business itself is still increasing.
Capacity expansion + category expansion continued to improve the company’s comprehensive competitiveness. In 2021, the company’s CNC blade production capacity has expanded to 60 million pieces, and the production capacity of 40 million pieces of raised projects will be released in an orderly manner. The company has become a leading enterprise in China in the field of CNC blades. While expanding the production capacity of cemented carbide NC blades, the company will expand its tool business horizontally to 5 million pieces of cermet blades, 3 million pieces of integral cemented carbide tools, 200000 sets of NC tools (cutter head and cutter body), and supplement the company’s short board, which will greatly enhance the company’s ability to provide overall cutting solutions and further replace Japan and South Korea European and American tool products have laid a solid foundation.
The consumption of cutting tools is expected to continue to grow, and the substitution of domestic imports is advancing steadily. As consumables in the manufacturing process, industrial cutting tools have an important impact on the quality and performance of products processed and produced. With the steady upgrading of China’s manufacturing industry and the continuous improvement of the penetration rate of CNC machine tools, the consumption scale of industrial cutting tools will grow steadily. Oke Precision Cutting Tools Co.Ltd(688308) with the development goal of medium and high-end tools, it continues to improve the tool performance and service capacity, and continues to promote the domestic substitution process of industrial tools, with broad development space.
Profit forecast and investment suggestions. Oke Precision Cutting Tools Co.Ltd(688308) is the leading enterprise of CNC cutting tools and the leader of serrated blades. It is estimated that EPS will be 2.27, 2.99 and 3.92 yuan respectively from 2021 to 2023, and the compound growth rate of net profit attributable to parent company in the next three years will be 54.0%. Give the company 35 times PE in 2022, with a target price of 104.65 yuan, and maintain the “buy” rating.
Risk tip: manufacturing investment has fallen sharply; The company’s capacity expansion is lower than expected; The competition pattern of the industry has deteriorated. forty-one thousand six hundred and twenty
