The product power will be upgraded in an all-round way, and the new capacity will be released soon. Since listing, Hongya has continued to increase R & D investment and extension mergers and acquisitions, enhance product power, and lead the domestic level of product flexibility, numerical control and automation. Throughout the historical performance, production capacity is an important factor driving Hongya's performance growth. Based on the previous expansion progress of the Masters project, the new capacity is expected to be put into production at 2023Q4, which is expected to drive the company's output value to continue to expand rapidly.
The improvement of the consumption structure of the furniture market is expected to lead to the recovery of furniture demand at the bottom.
The downstream of woodworking machinery and equipment faces furniture enterprises, which is greatly influenced by terminal real estate. In addition, the furniture consumption structure is mainly affected by two factors: (1) the consumer population is younger, and the panel customized furniture is more in line with their consumption concept and needs, and the penetration of the panel customized furniture increases, driving the growth of demand for middle and high-end woodworking machinery products. (2) with the support of national policy, the penetration of fine decoration increases, the proportion of engineering orders of furniture enterprises increases, and domestic equipment enterprises with the advantage of performance-to-price ratio will get a broad market space.
When the domestic substitution is carried out, the domestic leading enterprises are expected to accelerate their growth. In recent years, compared with the sales scale of overseas leaders in the Chinese market, the growth rate of domestic enterprises is significantly higher, which we think shows the improvement of the competitiveness of domestic leading enterprises and the improvement of domestic substitution rate in the domestic demand market. Compared with the global leader Homag Group, the current revenue scale of Hongya CNC is smaller than that of the global leader, and there are still some differences in product performance. Based on the overall and continuous improvement of its competitiveness in recent years, we believe that there is much room for Hongya CNC to improve its future revenue scale and global market share.
Profit forecast and investment advice: we expect Hongya CNC's 22-24-year net profit to be 5.46 / 6.41 / 785 million yuan respectively. With reference to comparable companies, and taking into account the increments brought about by the company's capacity expansion, Hongya CNC is given a valuation of 20 times its net profit in 2022 and a "buy" rating corresponding to a reasonable value of 25.76 yuan per share.
Risk tips: technology research and development is not as expected; fierce competition in the industry leads to a decline in gross profit margin; insufficient capacity release.