Binding bearing giant, undertaking industrial transfer, deep ploughing ring manufacturing, covering for the first time, "buy" rated Jinwo shares is the largest bearing ring manufacturer in China, mainly machining links, and the company is committed to extending the upper and lower reaches of the industrial chain. it is expected to complete forging, heat treatment, fine grinding and other links to enhance unit value and profitability. The company is expected to undertake the incremental demand brought by the transfer of the bearing industry chain to China and the specialized division of labor, and maintain the rapid growth of revenue and profits through continuous production expansion. We estimate that in 21-23, the company is expected to achieve revenue of 905Universe 1.39 billion yuan and return to its mother with a net profit of 0.65 Universe 135 million yuan.
In 21-23, the EPS is 1.36 CAGR 2.81 CAGR 4.06 yuan, and the 2022PE 4924max 16x, with reference to the average 2022PE expected by comparable companies of the same kind, 32x, considering that the company benefits from the transfer of the bearing industry chain to China, with a higher performance growth rate (21-23 CAGR comparable company average / Jinwo: 45.42% Universe 49.98%), and the target price is 98.55 yuan. First coverage, "Buy" rating.
Grasp the opportunity of the transfer of bearing industry chain and specialization, the company is expected to continuously enhance the status of the industrial chain according to the global bearing market size of 118.7 billion US dollars in Grand View Research,2020. The average value of the ring is about 35% of the finished bearing. according to our estimation, the global market scale of bearing ring is about 216 billion yuan in 2020, which has a broad space. According to the head Leopard Research Institute, the world's eight largest bearing enterprises have a total global market share of 70.7% in 2020, becoming a monopoly. Because: 1) the labor force in overseas workshops is relatively scarce; 2) bearing enterprises are gradually light capitalization and gradually outsource more processes; 3) domestic processing capacity and product quality continue to improve; ring production capacity and more processing processes are gradually entering the parts factory in China.
As the supplier of the top five bearing enterprises (accounting for 91.20% of the company's revenue in 2020), the company is expected to undertake the global demand for bearing rings and maintain rapid revenue growth through continuous production expansion.
Vertically extend the industrial chain, horizontally expand customers / increase market share, high-growing companies are expected to achieve higher growth by vertically completing the industrial chain process, horizontally expanding new products and new customers, and improving product value, profitability and market share. The company already has the ability to expand the business to the front-end steel pipe forging and back-end heat treatment. The heat treatment project plant has been consolidated in April 2020, and is expected to gradually increase production in 2022, and has set up a precision grinding technical team. at present, some products have been refined in small quantities. The expansion of fine grinding and heat treatment processes is expected to increase the unit value of the company's products and significantly improve product profitability.
The largest bearing ring manufacturer in China has self-made equipment and high operating efficiency. according to our investigation of downstream bearing factories, the domestic stable suppliers of rings from overseas leading bearing factories are generally about 10-15. Jinwo shares is the local bearing ring manufacturer with the largest revenue by 2021. The company has self-developed core technology, can quickly respond to the development of new products needed by customers, and has the ability to continuously develop new products for existing and new customers. The company's self-developed precision cutting equipment and other processes can effectively reduce the costs in the production process, improve processing accuracy and efficiency, and significantly enhance the core competitiveness.
Risk tips: intensified market competition, lower-than-expected production expansion progress, fluctuations in raw material prices, risk of loss of core technical personnel, lower-than-expected progress of new product / process verification, and high customer concentration.