\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 reach 215-230 million yuan in 2021, with a year-on-year increase of 100.1% to 114.06%. It is estimated that the impact of non recurring profits and losses on the net profit will be 30 million yuan, mainly due to the increase in investment income and government subsidies obtained by the company from purchasing principal guaranteed financial products with temporarily idle raised funds.
Key points of the report:
In the fourth quarter, the company continued its high growth performance, with compound performance expectations
In the single quarter of 2021q4, the company expects to realize a net profit attributable to the parent company of 45-60 million yuan, with a year-on-year increase of 50-100%, continuing the high growth of the company's performance this year. The growth driving force is mainly from the strong demand in the downstream market in 2021, the company's NC tool production capacity has increased greatly, the sales volume of cemented carbide products has increased, and the company's revenue has achieved scale growth. In 2021, the company further increased the development of new products, improved production efficiency, further improved sales channels and gradually increased the gross profit margin of products. At the same time, the company implemented fine management, reduced the expense rate and further enhanced the profitability of the company.
The raised investment project will be gradually put into operation in 2022 to create a basis for performance growth
According to the information publicly disclosed by the company, by the end of 2021, the company's annual production capacity of CNC blades was about 70 million pieces, and the theoretical annual production capacity of cemented carbide products was 2200 tons. The company's IPO raised and invested 40 million pieces of high-end CNC blades. The project has entered the commissioning stage and will be gradually put into production in the first half of 2022, According to our estimation, the company's annual production capacity of CNC blades is expected to reach 115 million pieces in 2023, and maintain a 28% CAGR growth from 2020 to 2023.
Strengthen the supporting capacity of solutions, and the product structure is expected to be continuously optimized to create a "simultaneous rise in volume and price"
At present, the company has accumulated a large number of independent R & D technologies for blade sales, and the performance indexes of some products have been close to those of Japanese and Korean manufacturers, which has the basis for promoting domestic substitution. The company's raised investment project has also expanded the product categories of high-performance bars, hard tools, CNC tools, ceramic blades and so on. In addition to expanding the capacity and increasing the "volume", the subsequent CNC blade business of the company is also expected to cut into the medium and high-end market by providing supporting liberation schemes, increase the share of value-added products and create the growth of "both volume and price".
Investment advice and profit forecast
We expect that the net profit attributable to the parent company from 2021 to 2023 is expected to be RMB 229 / 287 / 389 million respectively, corresponding to the current PE 32x / 25X / 19x. Considering the growth space of the cutting tool industry, the company's high-end CNC blade capacity continues to climb, and the optimization of product structure is expected to improve profitability and maintain the "buy" rating.
Risk tips
The progress of domestic substitution is less than expected, the scale expansion of tool market is less than expected, and the capacity expansion is less than expected.
