The development of multiple main industries, CNC machine tool business led to the continuous growth of profits. The company's business includes container handling equipment / CNC machine tool manufacturing and stainless steel trade. Among them, the gross profit of the CNC machine tool business accounts for about 78% of the company's total gross profit, and the revenue growth rate in 2019 is about 38%, which is the core driving force of the company's profit growth.
Stainless steel supply chain business, continuous expansion, optimization and integration to be listed. In 2014, the company began to enter the stainless steel trading business. With the help of Wuxi's location advantage, the operation scale of steel trade business continues to grow at a high level, with a plate income of 12.045 billion yuan and a gross profit margin of 0.98% in 2019. In 2018, the company optimized and integrated the stainless steel business plate, with Huasangtong's "steel net" as the core, focusing on the development of stainless steel online spot trading. At present, Huasangtong has started to change into a joint stock limited company and intends to be listed on a qualified international securities market recognized abroad.
Container handling equipment has ushered in a new stage of automatic / intelligent equipment volume. In order to improve the service quality and management level and reduce the operating cost, the investment in domestic port automation construction is gradually increasing. The automation of yard operation system is the basis of the development of automatic wharf, which mainly adopts full-automatic high-speed track crane technology. According to our estimation, based on the container throughput of 226 million TEU of domestic ports in 2018, the demand for automatic track cranes in domestic ports is about 5424, corresponding to a market space of nearly 100 billion yuan. In March 2019, the company signed an order contract with Singapore Port Group for 28 fully automatic rail container leading cranes with outstanding brand advantages. The R & D and production strength is outstanding, and it is expected that the market share of the company's automatic track crane products will be further higher than that of ordinary track cranes.
CNC machine tools, 5G new commercial opportunities, medium and large machine tool strategy continues to advance. 5G commercial enterprises have entered the acceleration period, and it is estimated that more than 500000 new 5G base stations will be built in 2020, and the demand for processing precision components such as radiators will grow rapidly.
The company has developed a series of vertical machining centers such as 850HII and 1066HC for the processing of 5G base station heat sink, which has covered the first-and second-class suppliers of major domestic communication equipment enterprises. On the consumer electronics side, 5G is expected to drive the trend of replacement. High-speed drilling centers for the production of metal frames are expected to grow. In addition, the company has gradually promoted the development strategy of medium and large specifications and high precision machine tools, and the commissioning of the new manufacturing base in Chongqing will further realize the autonomy of some key components and subsystems of the company's machine tools, reduce the external dependence of core components, and enhance the comprehensive competitiveness of the company's CNC machine tool business "core components-whole machine-solution". Long-term growth is expected.
Profit forecast and valuation. It is estimated that the return net profit of the company from 2020 to 2022 is 4.28,5.50 and 716 million yuan respectively, and the corresponding EPS is 0.42,0.55,0.71 yuan per share respectively. For the first time, the company was given an "overweight" rating.
Risk tips: stainless steel supply chain business integration development is not as expected; fully automated track crane sales are not as expected; CNC machine tool business growth is not as expected; this paper estimates are based on certain assumptions.