Key points of investment
Affected by undelivered orders, Q1 performance was under pressure, and the CNC system business grew rapidly:
2024Q1 achieved revenue of 243 million yuan, a decrease of 31.96% over the same period last year. By product: ① CNC system and machine tool sector: the company seizes the market window, adheres to high-end leadership, and achieved sales revenue of 163 million yuan, +42.15%; ② Industrial robots and intelligent production line sector: achieved sales revenue of 65 million yuan, -70.95% year-on-year, mainly due to the impact of ongoing orders related to the company's NEV intelligent equipment business. As of the end of the first quarter of 2024, the company's intelligent production line orders amounted to 853 million yuan; ③ NEV supporting sector: The company stepped up the development of the NEV market to achieve sales revenue 0.09 billion yuan, +21.00% YoY.
The gross margin of sales increased due to the product structure, and the cost ratio was high during the period:
2024Q1 achieved net profit of 0.69 million yuan (same period last year - 39 million yuan) and net profit of non-return to mother of 81 million yuan (same period last year - 58 million yuan). ① Margin side: 2024Q1 sales gross margin of 34.8%, compared to +3.6 pct. We judge that it is mainly an increase in revenue share of high-end CNC systems with high gross margin; ② Expense side: 2024Q1 company period expense ratio of 75.3%, +25.3pct year over year, of which the sales/management (including R&D)/financial expense ratios were 19.4%/52.2%/3.7%, respectively, +6.0/+17.7/+1.6 pct year-on-year, respectively, due to reduced operating income but cost rigidity, and scale effect High enterprise.
It is planned to add a high-end five-axis CNC system and cooperate with Guozhi Center to strengthen the company's core competitiveness:
On March 14, 2023, the company announced that it plans to raise 1 billion yuan in supporting capital, mainly for: (1) Industrial robot technology upgrade and industrialization base construction project (Phase I): After completion, the project will form a production capacity of 20,000 sets of industrial robots per year. (2) Five-axis CNC System and Servo Motor Key Technology Research and Industrialization Project (Phase I):
It is estimated to produce 1,200 sets of 5-axis machining center CNC systems, 500 sets of 5-axis turn-milling composite CNC systems, 300 sets of 5-axis laser CNC systems, 2,500 sets of special 5-axis CNC systems, 250,000 servo motors, and 50,000 linear motors per year.
Cooperate with Guozhi Center to strengthen the company's core R&D capabilities. On October 27, 2023, the company announced that it intends to sign a “strategic cooperation agreement” with Guozhi Center. The two sides will jointly develop technology development and cooperation on high-performance CNC technology and high-end CNC systems, industrial Internet platforms, intelligent servo and dynamic modeling, intelligent motor technology, robots and intelligent production lines. During the cooperation period, the company plans to pay Guozhi Center a total of 30 million yuan in technology research and development expenses. This cooperation is expected to fully strengthen the company's core R&D capabilities.
Deeply bind leading domestic machine tool companies to accelerate the localization of high-end CNC systems. Through deep binding with domestic machine tool companies, the company cooperated with companies such as Shandong Haomai, Dongguan Evmi, and Ningbo Haitian to jointly develop vertical, horizontal, and gantry five-axis machining centers, and cooperate with Huagong Laser, Onke Laser and other companies to jointly develop models such as 5-axis etching machines and 5-axis laser cutting machines to accelerate the localization of high-end CNC systems.
Profit forecast and investment rating: Considering the short-term impact of order delivery, we are still optimistic about the company's growth, so we maintain the company's 2024-2026 net profit forecast of 1.08/1.58/ 224 million yuan, respectively. The current stock price corresponds to dynamic PE of 52/36/25 times, respectively, maintaining an “increase in holdings” rating.
Risk warning: Downstream recovery falls short of expected risks, and market competition increases risks and technology research and development risks.