Key points of investment

This Friday (5/19), a GEM listed company “Pryde” purchased it.

Prade (301353): The company is mainly engaged in R&D, design, production and sales of electric tools. Its products are widely used in various fields such as home decoration, industrial manufacturing, building construction, and garden maintenance. The company achieved operating income of 392 million yuan/673 million yuan/704 million yuan respectively in 2020 and 2022, YOY was 32.87%/71.71%/4.59% in that order, and the three-year compound annual revenue growth rate was 33.63%; achieved net profit of 68 million yuan/95 million yuan/99 million yuan, in that order, YOY was 83.08%/40.42%/4.24%, and the three-year compound annual growth rate of Fumo's net profit was 38.90%. In the latest reporting period, 2023Q1 achieved operating income of 158 million yuan, a year-on-year decrease of 2.01%; it achieved net profit of 15 million yuan to its mother, a year-on-year decrease of 39.66%. According to preliminary forecasts, the company expects to achieve net profit of 4,500.00 to 510.00 million yuan from January to June 2023, a year-on-year decrease of about 20.00%.

Investment highlights: 1. The company is one of the earliest domestic enterprises to enter the power tool industry. At present, it has established long-term and stable cooperative relationships with many leading global power tool customers. The company has been deeply involved in the power tool industry for nearly 20 years, has reached cooperation with more than 200 companies, and has become a core ODM supplier for many internationally renowned power tool brands and retailers; it has cooperative relationships with leading companies such as Stanley Black & Decker (Stanley Black & Decker), BOSCH (Bosch), Metabo (Metabo), Harbor Freight Tools (HFT), and Einhell (Anhai); at the same time, the company's cooperative relationships with these customers have continued for more than 10 years; at the same time, the company's cooperative relationships with these customers have continued Deepening, sales revenue from these customers continued to grow steadily during the reporting period. Relying on the advantages of customer resources, the company's products sell well overseas and have entered nearly 100 countries and regions in Europe, America, Asia Pacific and other markets. 2. The company actively promoted production capacity construction, established an overseas production base in Thailand in 2018, and built a fund-raising project ahead of schedule in 2020. In recent years, the company's production capacity has been saturated, and the capacity utilization rate reached over 90% during the reporting period. In order to further meet the needs of downstream customers, the company is actively promoting the construction of new production bases. On the one hand, the company set up a subsidiary in Thailand in 2018 and now has 3 self-built factories and 1 leased property, which can better serve overseas markets. At the same time, as the US imposes tariffs on imported goods from China one after another, the construction of overseas production bases will also help the company mitigate the risks brought about by the intensification of the trade conflict between China and the US. On the other hand, the company's fund-raising project “DC lithium battery power tool project with an annual output of 8 million units” was built ahead of schedule in 2020 and partially upgraded in 2022 (a total conversion of 206 million yuan, accounting for 32.72% of the project).

Comparison of listed companies in the same industry: Ruiqi Co., Ltd., Kangping Technology, and Superstar Technology were selected as Pryde's comparable listed companies, but since comparable companies differ greatly from the company in terms of specific product types and revenue structures, comparability may be relatively limited. Judging from the comparable companies mentioned above, the average revenue scale of comparable companies in 2022 was 4.680 billion yuan, and the gross sales margin was 16.66%. In comparison, the company's revenue scale fell short of the average of its peers, but its gross margin was in the middle to high range of the same industry.

Risk warning: There is still a possibility that companies that have begun the inquiry process will not be able to go public due to special reasons; company content is mainly based on the content of prospectus and other public information; there is a risk that the selection of listed companies in the same industry is not accurate enough; there may be interpretation deviations in the selection of content data. The specific risks of listed companies are shown in the text.