上半年营收及利润同比增长较快。营收增长较快主要系公司积极应对市场变化，通过技术创新、销售渠道完善、加强内部管理等多种方式推动公司各项业务平稳发展；此外，公司海内外市场开拓、推动IPO 及可转债项目新产能落地，产品供应能力与服务能力不断增强，产销量向好。上半年公司计提的股份支付费用减少、管理人员薪酬等费用减少是净利润提升的重要因素。Matters:
The company released its 2024 semi-annual report: in the first half of the year, the company achieved revenue of 0.41 billion yuan, +14.93% year over year; net profit to mother 0.072 billion yuan, +15.35% year over year; after deducting non-net profit of 0.071 billion yuan, +19.52% year over year. Q2 achieved revenue of 0.24 billion yuan, +16.17% year over year; net profit to mother 0.055 billion yuan, +43.10% year over year, after deducting non-net profit of 0.054 billion yuan, +48.26% year over year.
Commentary:
In the first half of the year, revenue and profit increased rapidly year over year. The rapid revenue growth is mainly due to the company actively responding to market changes and promoting the steady development of the company's various businesses through various methods such as technological innovation, sales channel improvement, and internal management; in addition, the company develops domestic and overseas markets, promotes the implementation of new production capacity for IPOs and convertible bond projects, continuously enhances product supply capacity and service capabilities, and improves production and sales. The reduction in share payment expenses calculated by the company in the first half of the year and the reduction in expenses such as management remuneration were important factors in the increase in net profit.
It is expected that the volume and price of CNC tools will continue to rise in the second half of the year. As an important consumable in the manufacturing industry, tools have strong procyclical properties, and the manufacturing boom has a great impact on tool demand. The price of tungsten powder rose significantly in the first half of '24, and tungsten powder is an important raw material for CNC tools and has an impact on tool prices. In addition, iterative product upgrades and price differences at home and abroad are also important factors in the rise in blade prices. The company's CNC blade sales volume was 0.103 billion pieces in '23 (0.09 billion pieces in '22), and the company's CNC blade sales are expected to continue to increase in '24.
There is broad scope for domestic substitution, and overseas exports are an important growth point. Through R&D and innovation, domestic brands have continuously narrowed the technology gap with well-known overseas manufacturers and penetrated into the high-end tool market. According to our estimates, in 2022, the localization rate (value) was about 35% and the localization rate (quantity) was about 70%; domestic tools were “good and inexpensive”, and the tool price difference between domestic and foreign companies was large. According to the China Machine Tool Industry Association, the average price of imported CNC blades was about 30 yuan/piece, and the average domestic sales price was about 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price of domestic CNC blades was around 7 yuan/piece; in '23, the average sales price for domestic and foreign companies was around 7 yuan/piece; in '23, the average sales price 603 million yuan, +60.90 year over year %. The company's overseas revenue is expected to continue to increase in '24.
Investment advice: We expect the company's revenue for 2024-2026 to be 0.993, 1.254, and 1.59 billion yuan, respectively, and net profit to mother of 0.204, 0.27, and 0.392 billion yuan, respectively, and corresponding EPS of 3.30, 4.36, and 6.33 yuan respectively. Referring to the valuation level of comparable companies, based on factors such as the company's leading domestic private tool enterprises, domestic and foreign business, and positive progress in the overall tool business, 18 times PE was given in 2024. The target price was 59.40 yuan, maintaining the “strong promotion” rating.
Risk warning: The recovery in the manufacturing industry fell short of expectations; the progress of production expansion fell short of expectations; the expansion of new industries and overseas markets fell short of expectations.