I. Overview of events
Recently, we have conducted a survey of the company and communicated with the management of the company on the operation and development direction.
II. Analysis and judgment
Focus on the motion control system and work for the better in the future.
The company is a high-tech enterprise that provides motion control system solutions for CNC equipment manufacturers, mainly engaged in R & D, production and sales of industrial motion control systems. The products are mainly used in the sub-industry field of motion control system, especially in the woodworking market. All the motion control products of the company are based on the same software platform, and the products that have been independently developed in the past ten years include engraving and milling control system, cutting control system, manipulator control system, etc., which can be used in all kinds of engraving machines, engraving and milling machines, machining centers and other fields. At present, the company provides multi-axis motion control solutions for the woodworking industry, which is widely used in solid wood carving, plate cutting, handicraft carving and many other fields. We believe that the company has obvious advantages in the industry, sufficient technology accumulation, high gross profit margin, and is expected to maintain high growth in the future.
Large investment in technology R & D and sales model, optimistic about the development of cross-downstream industries
The company has always attached great importance to technological innovation to promote development. As of June 30, 2017, the company had a total of 257 R & D personnel, accounting for 53%; the R & D expenditure was 20.59 million yuan, an increase of 52% over the same period last year. The company already has high-speed and high-precision motion control technology for complex curved curves, and is one of the few domestic enterprises that fully master the core technology and provide mature commercial products. At the same time, the advantage of industrial server technology is obvious. In the leading position in China.
The company's products and services adopt direct sales model, customers are sticky, and 17H1 revenue increased by 40.38% compared with the same period last year. At present, the company mainly focuses on traditional industries such as woodworking furniture and metal moulds, and will focus on developing 3C and machining centers in the future to break through the ceiling of market segmentation. We believe that the company's cross-industry development is an important strategy to expand the growth space, with the help of product technology competitiveness is expected to seize market share and promote long-term development.
Raise funds to invest in controllers and servers, industrialization projects gradually promote the global industrial server industry is mainly controlled by Germany and Japan, the development of domestic servers is relatively backward. The important direction of the company's IPO fund-raising is the servo driver industrialization project, the establishment of Weizhi servo brand, and the product and market are gradually advancing; at present, the company has a controller integrated machine to support the bus, and the design and development of the control card adaptation bus is expected to make significant progress in the second half of this year. We believe that the company is more technologically advanced in the server market, and the revenue of the 17H1 server business has increased by 338% compared with the same period last year, which has become the main driver of the company's performance growth. The server business is expected to improve the company's overall performance in the next three years.
Third, profit forecast and investment suggestions
It is estimated that the EPS of the company from 2017 to 2019 is 1.24,1.58 and 1.88 yuan respectively, and the corresponding PE is 59x, 46x and 39x respectively. Based on the company's leading position in the industry, the scarcity of the server business and the optimism of "made in China 2025" to drive industry growth, the reasonable valuation range for the company in 2017 is 60-65 times, and the reasonable valuation for the next 6 months is 74.4-80.6 yuan. the first coverage was given a "cautious recommendation" rating.
Fourth, risk tips:
Technology research and development is not as expected; cross-industry promotion is not as expected; downstream demand is shrinking.