24Q1 had revenue of 1,766 billion yuan/yoy +7.32%, net profit to mother of 400 million yuan/yoy +28.70% Haomai Technology released its quarterly report. 2024Q1 achieved revenue of 1,766 billion yuan (yoy +7.32%, qoq -5.27%), net profit of 400 million yuan (yoy +28.70%, qoq -9.80%), deducting 3.75 (yoy +23.97%). We expect the company's 2024-2026 EPS to be 2.27/2.57/2.91 yuan, respectively. Comparatively, the company's 2024 Wind unanimously expected an average PE value of 17.39 times. Considering the premium brought about by the company's leading position in tire abrasives and the growth brought by the new high-end machine tool business, the company was given 20 times PE in 2024, raised the target price to 45.48 yuan (previous value: 33.17 yuan), and maintained an “increase” rating.
24Q1's profitability performance was impressive. The gross margin/net margin increased the 2024Q1 company's gross profit margin by 35.49% (yoy+4.43pct, qoq-0.95pct), and the net profit margin was 22.70% (yoy+3.82pct, qoq-1.08pct). In terms of the period cost ratio, 2024Q1 has a period cost ratio of 9.97% /yoy+0.18pct, of which sales expenses ratio is 1.48% /yoy+0.15pct, management expenses ratio 3.28% /yoy+0.47pct, R&D expenses rate 5.47% /yoy+0.88pct, and financial expenses ratio -0.26% /yoy-1.31pct.
The development of leading machine tools follows the rule of “feeding back equipment for specific needs”. The Haomai machine tool business is also the same. At the beginning of development, Haitian Precision, the domestic private machine tool leader, its equipment was mainly used for processing injection molding machines by its brother company Haitian International. It was thanks to the specific needs of injection molding machine leader Haitian International that the CNC machine tool business of Haitian Precision was rapidly iterated. Coincidentally, Neway CNC is a leading enterprise in the balanced development of the domestic machine tool business. At the beginning of development, its equipment was mainly used for valve processing of the brother company Neway Co., Ltd. Haomai's CNC machine tool business is also similar to Haitian Precision and Neway CNC. As a tire mold leader, Haomai Technology requires special machine tools for processing. It is also after internal polishing and iteration that Haomai Technology officially sold the machine tool business abroad, which is expected to replicate the success path of leading companies.
Domestic replacement of high-end CNC machine tools is accelerating, and high-quality invisible champions are fully benefiting. According to data from the China Machine Tool Industry Association, in 2023, China's metal cutting machine tool consumption was RMB 110.8 billion, a year-on-year decrease of 15.0%. Among them, imports of metal cutting machine tools amounted to US$5.14 billion, down 8.2% year on year, achieving a trade surplus in the first year. From January to January 2024, China's metal cutting machine tool export value was US$1.32 billion, up 10.6% year on year, maintaining a trade surplus. Driven by high-end applications such as new energy vehicles and aerospace, the trend of high-end domestic machine tools is clear.
Risk warning: risk of geopolitical and exchange rate fluctuations; risk of rising raw material prices.