Core views
Recently, the Ministry of Industry and Information Technology announced the “First (Set) Major Technical Equipment Promotion and Application Guidance Catalogue (2024 Edition)”, which includes four types of additive manufacturing equipment: microscale powder bed melting equipment, full-coverage multi-laser powder bed melting equipment, ultra-large format powder bed melting equipment, multi-electron beam selective melting additive manufacturing equipment, etc. With the advancement of China's independent industrial system construction and increasing requirements for equipment localization, technologies such as additive manufacturing and domestically produced autonomous equipment have gained a good development environment, and enterprises related to the industrial chain have received great support. As a leading domestic additive manufacturing equipment enterprise, the company has two-wheel drive metal+polymer equipment, and equipment performance remains leading. At the same time, downstream application scenarios for additive manufacturing continue to expand, and the military and civilian market is growing together, and there is broad room for future growth.
occurrences
Recently, the Ministry of Industry and Information Technology announced the “First (Set) Major Technical Equipment Promotion and Application Guidance Catalogue (2024 Edition)”. The China Additive Manufacturing Industry Alliance Secretariat supports the revision of the “First (Set) Major Technical Equipment Promotion and Application Guidance Catalogue (2024 Edition)” Part 1: High-end Industrial Mother Machine Section 6 Additive Manufacturing Equipment Part 1) Microscale Powder Bed Melting Equipment, 2) Full coverage multi-laser powder bed melting equipment, 3) ultra-large format powder bed melting equipment, and 4) manufacturing four types of additive materials such as multi-electron beam selective melting The core technical indicators of the equipment have been completed Detailed instructions.
Brief review
1. The additive manufacturing industry is booming, and the company's performance is growing steadily
With the advancement of China's independent industrial system construction and increasing requirements for equipment localization, technologies such as additive manufacturing and domestically produced autonomous equipment have received a good development environment, and enterprises related to the industrial chain have received great support. As a leading domestic additive manufacturing equipment enterprise, the company's metal+polymer equipment is two-wheel drive, fully benefiting from the boom in the additive manufacturing industry, and the company's performance is growing steadily. 2024Q1 achieved operating income of 0.124 billion yuan (YoY +23.49%), net profit of 0.026 billion yuan (YoY +28.44%), net profit not attributable to mother 0.024 billion yuan (YoY +29.21%); the company's revenue grew steadily, mainly due to the company's continued deepening technological innovation, strengthening its industrial layout, and continuously increasing R&D investment and market development efforts. The company's profitability remains high, mainly due to the increase in sales of the company's 3D printing equipment and the corresponding increase in revenue to generate profits. The gross operating margins for 24Q1 and 2023 were 53.90%/51.60%, respectively, a decrease of 3.07pcts/1.72pcts compared to the same period last year, facing certain price competition pressure.
2. The additive manufacturing market continues to grow, and downstream applications continue to explode. According to Wohlers statistics, the global additive manufacturing output value reached 18 billion US dollars in 2022, an increase of 18.3% over the previous year, continuing the trend of double-digit revenue growth in the additive manufacturing industry in 25 years. According to Wohlers forecasts, additive manufacturing revenue will double by 2025 compared to 2020 to $29.8 billion, and grow 5.6 times to $85.3 billion by 2030. In the aerospace field, due to factors such as complex component shapes, high processing costs and lightweight requirements, additive manufacturing has developed into a key core technology to improve design and manufacturing capabilities. It can be used to achieve complex internal structures, improve component performance, and can also be used for component repair, extend the service life of equipment, and reduce economic losses. In the automotive industry, 3D printing technology can achieve mold-free design and manufacturing, helping enterprises shorten the design and production cycle of product concept models and optimize design to reduce costs and shorten product launch time. In the field of consumer electronics, titanium alloy has characteristics such as high hardness, low density, and human compatibility. Using titanium alloy as an electronic product shell is not only very friendly to people with metal allergies, but also reduces scratches and weight. 3D printed titanium alloys have excellent cost performance. Honor MagicV2 has used additive manufacturing technology to manufacture axles and hinges. The company is a leader in industrial additive manufacturing equipment in China. Its business covers aerospace, automotive, consumer electronics and other fields, and is expected to fully benefit from the rapid growth of the industry.
3. Two-wheel drive for metal+polymer additive equipment helps the company develop in the future. The company focuses on industrial-grade additive manufacturing, has independent R&D and production capabilities for 3D printing equipment, materials and software, and ranks among the highest in the world in terms of sales scale. Through continuous independent innovation, the company has established an “equipment-software-material-process-application” full-chain integrated independent technology system covering selective laser melting (SLM) and selective laser sintering SLS) technology routes, forming independent intellectual property rights for related technologies. In 2023, the company continued to increase R&D investment and expand the R&D personnel team. The total R&D investment was 82.3661 million yuan, an increase of 32.70% over the previous year, accounting for 13.59% of revenue. By the end of 2023, the company had launched a number of large-scale and efficient metal additive manufacturing systems for industrial users, including the world's first FS1521M series with 16 lasers, 1.5 meter molding equipment, launched a variety of metal equipment such as FS350M, FS511M, FS811 series, FS1211 series, etc., and launched a variety of high-performance polymer materials such as “nylon 11" and PA6, which have both high toughness and cost performance. It has successfully overcome 340℃ ultra-high temperature sintering technology with high efficiency, high quality, safety and intelligence Advantages such as autonomy and control bring more possibilities for new applications and large-scale industrialization in aerospace, automotive, mold, medical and other industries, and accelerate the mass production process of industrial-grade additive manufacturing. The company continues to improve its product layout in the field of 3D printing equipment and materials to meet the diverse needs of customers in various downstream industries.
4. Repurchase shares at the bottom to confirm the investment value of the enterprise
On March 11, 2024, the company passed the “Proposal on the Plan to Repurchase the Company's Shares through Centralized Bidding Transactions”, agreeing that the company would use part of the overfunded capital obtained from the initial public offering of RMB common shares to buy back the company's shares through centralized bidding transactions. The shares repurchased are intended to be used for equity incentives or employee stock ownership plans. The repurchase price shall not exceed RMB 30 per share (including the number of shares), the repurchase amount shall not be less than RMB 10 million (including the number of shares), and not more than RMB 20 million (including the number of shares). The implementation period for the share repurchase is within 12 months from the date the board of directors of the company reviewed and approved the share repurchase plan. As of June 30, 2024, the company has repurchased 778,280 shares of the company through centralized bidding transactions through the Shanghai Stock Exchange trading system, accounting for 0.19% of the company's total share capital. The highest price of the repurchase transaction was 23.99 yuan/share, the lowest price was 20.82 yuan/share, and the total capital used was RMB 17,328,328.23 (excluding transaction fees such as stamp duty and transaction commissions). This repurchase is a strong proof of the company's stable profitability and sufficient capital reserves. It reflects management's strong expectations for the company's future development. It is expected that this repurchase will help boost market confidence and protect the rights and interests of small and medium-sized shareholders.
5. Profit forecast and investment rating: Leading additive manufacturing equipment companies, downstream application scenarios continue to expand. The “buy” rating companies are leading domestic additive manufacturing equipment companies. Metal+polymer equipment two-wheel drive, equipment performance remains leading. At the same time, downstream additive manufacturing application scenarios continue to expand, and the military and civilian market is growing together, and there is broad room for future growth. We are optimistic about the company's future prospects. The company's net profit from 2024 to 2026 is estimated to be 1.51, 1.83 million yuan, and 222 million yuan, respectively, with year-on-year increases of 15.04%, 21.49%, and 21.10%, respectively. Corresponding PE from 24 to 26 will be 53.11, 43.72, and 36.10 times, respectively, giving a purchase rating.