The company is one of the leading manufacturers of laser processing control systems in China, a national “specialized, special and new” little giant.
The company is one of the few domestic companies that also master the two mainstream control system technology routes of laser galvanometer and laser servo. In 2022, the total number of shipments of the company's galvanometer control system products accounted for about one-third of the total market, maintaining the largest market share in the domestic application segment. The company's main products include laser processing control systems, laser system integrated hardware, and laser precision processing equipment. Downstream covers 3D printing, consumer electronics, new energy, semiconductors, automobiles and other fields. In 2018-2022, the company's revenue increased from 70 million yuan to 198 million yuan, with a CAGR of 29.84%; in 2018-2022, net profit to mother increased from 17 million yuan to 39 million yuan, and GAGR was 22.70%.
The laser processing control system is a laser equipment control link. It is mainly divided into a laser galvanometer control system and a laser servo control system. Laser galvanometer control systems are mainly used in high-precision micro-processing fields such as high-precision, high-speed, and micro-machining, while laser servo control systems are mainly used in high-power, large-format macroprocessing fields. In the field of laser galvanometer control systems, the company is in a leading position in China, with a market share of 32.29% in 2020.
In the field of medium and low power laser servo control systems, Baichu Electronics and Weihong Co., Ltd. occupy the main share in the domestic market. The company will continue to lay out the servo control field, and it is expected to create a second growth curve in the medium to long term.
Develop high-end laser galvanometer control systems, and replace domestic ones to open up room for growth. The laser galvanometer control system is mainly suitable for small-format and precision processing. In addition to laser welding, cleaning, etc., the main applicable laser power is concentrated within 1.5KW. In high-end applications, it is currently mainly dominated by international manufacturers such as German Scaps and German Scanlab. Driven by the company's high investment in R&D, the market share of the high-end market is expected to increase steadily, and there is plenty of room for domestic replacement.
Vigorously lay out the high-end galvanometer business, and combine software and hardware to enhance market competitiveness. The company's laser system integrated hardware products include galvanometers, lasers, field mirrors and other types of hardware mainly equipped with laser processing equipment. Customers of such products are laser processing equipment manufacturers, usually the company's control system customers. The company will focus on galvanometer hardware research and development to continuously enhance the competitive advantage of its products, which is expected to become an important growth point for the company in the future.
Investment advice: We expect the company to achieve revenue of 220 million yuan, 273 million yuan and 339 million yuan respectively in 2023-2025, and realized net profit of 44 million yuan, 69 million yuan, and 94 million yuan respectively. The corresponding EPS is 0.43 yuan, 0.68 yuan, and 0.91 yuan respectively. Referring to the valuation level of comparable companies, considering that as a leading domestic laser processing and control system enterprise, the company is actively expanding the high-end galvanometer hardware business and servo control system business, and has made positive progress. With its own technical advantages, the market share is expected to gradually increase. For the first time, coverage was given 40 times PE in 2024, with a target price of 27.20 yuan, giving it a “recommended” rating.
Risk warning: The expansion of high-end galvanometer systems falls short of expectations, the expansion of high-end galvanometer hardware business falls short of expectations, and the expansion of laser servo control systems falls short of expectations.