A leading domestic manufacturer of laser welding equipment, a platform-based layout that continues to expand new application scenarios, the company is a leading supplier of laser welding equipment and intelligent manufacturing solutions in China. Based on its in-depth understanding of lasers, welding processes, and automation, the company has an obvious competitive advantage. Since 2021, the company has benefited from the high prosperity of the lithium battery industry and the rapid growth of the company's performance. In addition, the company has actively explored demand in the fields of 3C, automobile manufacturing, hardware and home appliances, optical communications, etc., and laid out a long-term growth track. We expect the company's revenue in 23-25 to be 35.83, 42.69, and 4.798 billion yuan, respectively, and EPS for 23-25, 1.14, 1.29, and 1.84 yuan respectively. Comparable to the company's 24-25 Wind's unanimous expectation of PE of 17.9 times and 13.0 times. Considering the company's technological leadership and high performance growth in the field of laser welding, we gave the company a net profit valuation of 20x PE in 24, with a target price of 25.80 yuan, maintaining the purchase rating.
The company is a leading enterprise in laser welding equipment. It has established good cooperative relationships with leading enterprises in various industries. The company was founded in 2005, focusing on the research and development of precision laser welding machines and complete laser welding equipment. More than ten years of hard work have given the company outstanding advantages in the welding segment. It has a deep understanding of the industry where downstream customers are located, and is deeply involved in the development of new technology paths for leading enterprises in various industries. The company has established strategic partnerships with leading high-quality enterprises in various industries, including Ningde Era, BYD, Guoxuan Hi-Tech, Everweft Lithium Energy, Honeycomb Energy, Foxconn, Tyco Electronics, Changying Precision, NIO, Panasonic, Samsung, etc.
Platform-based technology has significant advantages. Multiple downstream fields are working together to expand new application scenarios The laser welding equipment industry is in a stage of rapid development. According to the “2023 China Laser Industry Development Report”, the market sales revenue of complete laser welding equipment is expected to be 10.48 billion yuan/yoy +26% in 2023, and the company's market share is 16%. The company's platform-based technology has significant advantages, and many downstream application fields are expected to work together, mainly including: 1) 3C industry: on the one hand, the company revolves around button battery assembly lines, and on the other hand, benefits from the European trend of prohibiting the use of glue-bonded batteries in electronic products. The welding technology for small steel-shell batteries laid out ahead of schedule is expected to bring revenue growth; 2) energy storage batteries and 4680 batteries will lead to horizontal expansion of the power battery industry; 3) hardware and auto parts industry: localization has increased application penetration; 4) actively exploring application scenarios in fuel cells, medical devices and photovoltaics industries.
Target price: 25.80 yuan, maintain buying rating
Beginning in 2021, strong demand in the downstream power battery industry led to rapid revenue growth. As of the first half of 2023, on-hand orders (excluding tax) reached 4.6 billion, while new production capacity was put into operation one after another, providing strong support for the company's sustainable performance. In 24-25, Wind of Comparable Company unanimously expected PE to be 17.9 times and 13.0 times. Considering the company's technological leadership in the field of laser welding and the multi-industry platform-based layout, performance growth is high. We expect net profit of 3.88, 4.39, and 622 million yuan, giving the company a valuation of 20x PE with a target price of 25.80 yuan, maintaining the purchase rating.
Risk warning: The rapid rise in upstream costs affects demand, which in turn affects the progress of battery production expansion; the risk of rising raw material costs; the risk of single customer dependency.