The world's leading PCB tool company, multi-dimensional business layout. The company is committed to providing integrated solutions for tools, materials, equipment, etc. for enterprises in the fields of PCB and CNC precision parts. The products mainly include miniature drills, cutters, brush wheels, CNC tools, special PCB tools, automation equipment, functional film products, etc. In 2018-2022, the company's revenue increased from 529 million yuan to 1,219 million yuan, the CAGR was 23.19%, and net profit to mother increased from 70 million yuan to 223 million yuan, and the CAGR reached 33.80%.
The PCB industry is iterating on technology, and the drilling business is expected to benefit from the increased density of PCBs. China's PCB miniature tools are still in the development stage, and there are few enterprises with both large-scale production and high-level production technology. According to Prismark's research report, the global sales volume of PCB drills in 2020 was about 2,580 billion, of which the company's market share was about 19%, ranking 1st; the 2nd to 4th places were Kaneshu Seiko, Japan's Uneng, and Advanced Point Technology, with market shares of about 18%, 14%, and 9%, respectively. In the future, PCB boards will develop in the direction of multi-layer boards, high density, high integration, and small aperture, which will bring demand for more miniature drills. The production and sales of the company's PCB drills have increased rapidly, and the project under construction can achieve an annual output of 480 million drills, which is expected to further strengthen the company's leading position.
CNC tool revenue continues to grow, and titanium alloy processing tools open up room for growth. The company's CNC tool revenue scale increased from 18.49 million yuan in 2019 to 47.85 million yuan in 2021. The company's CNC tools are currently mainly 3C tools, supplemented by standard tools, but they have gradually begun to expand into various fields such as automobiles, aerospace, and dentistry; in addition, the company is actively deploying CNC tools for titanium alloy processing. Since processing titanium alloy materials cause greater loss of tools, the price of titanium alloy processing tools will be higher than that of stainless steel processing tools and aluminum alloy processing tools. As the future application trend of titanium alloy materials in 3C increases, the demand for tools will also increase accordingly. It is expected that after expanding production in the first quarter of 2024, the comprehensive monthly production capacity will be about 60 million Support, implementation of fund-raising projects After completion, the comprehensive monthly production capacity is about 1 million sticks.
The subsidiary Dingtai Robotics is gradually shifting from empowering internal production to export sales. The company has now achieved independent R&D and manufacturing of full-process CNC tool production equipment, including tool coating processing equipment, and the quality is stable and reliable, production delivery is controllable, and the core products are highly competitive. On the one hand, it will enhance the market competitiveness of the company's PCB drills and CNC tools. On the other hand, Dingtai Robotics' strategic adjustments will mainly shift from enabling internal production to export equipment, which is expected to open up room for the company's future growth.
Actively explore emerging industries in collaboration with main businesses and forward-looking layout of functional membrane businesses. While the company continues to be deeply involved in the PCB field, it is also actively focusing on emerging industries related to its main business and growing well. The main products in functional film products include mobile phone anti-privacy film, explosion-proof film products for household appliances, automotive light control film products, and AG explosion-proof film products. 2023H1's functional membrane revenue was 27.75 million yuan, a year-on-year increase of 93.17%.
Investment advice: We expect the company to achieve revenue of 1,278, 16.00 and 2,066 billion yuan respectively in 2023-2025, and realized net profit of 2.35, 3.25, and 426 million yuan, respectively, and corresponding EPS of 0.57, 0.79, and 1.04 yuan respectively. Referring to the valuation level of comparable companies, based on the company's leading global PCB tool production company, gradually expanding high-growth businesses such as CNC tools, automation equipment, and functional films, it was given 30 times PE in 2024, with a target price of 23.70 yuan. For the first time, coverage was given, and a “strong promotion” rating was given.
Risk warning: downstream PCB industry demand falls short of expectations; development of new business falls short of expectations; risk of technology substitution