[investment points]
Domestic machine tool leader, sprint high-end market. Founded in 2003, the company entered the field of high-end CNC machine tools after the acquisition of Shenzhen Genesis in 2015, relying on the rapid development of 3C business to develop into a domestic machine tool leader. The loss-making consumer electronics precision structure business began to be spun off in 2018, and the former largest shareholder gradually reduced its holdings. In 2021, the company's founder completed actual control, led the company's comprehensive reform, and set up a high-end machine tool brand and division to enter the high-end market.
Benefiting from the trend of domestic substitution, it extends horizontally and vertically to expand new growth points. The industrial mother machine is an important tool of a big country, and the national policy supports the independent control of the machine tool industry. At present, the high-end machine tool market is basically occupied by foreign brands, domestic manufacturers rely on imported core components for a long time, the company is the backbone to achieve domestic replacement of machine tools. The company has a full range of products. In 2023, Heller's high-end brand will achieve a breakthrough from research and development to sales, extending the company's products to high-end fields. in addition, the company is also actively expanding the new application areas of core products and building new energy into an important growth point of performance. robot manufacturing ahead of schedule.
3C market recovery, Apple Inc new product catalysis. As the downstream destocking rhythm of consumer electronics comes to an end, coupled with national policies to stimulate consumption, we expect the inflection point of the consumer electronics market to advance.
Apple Inc's newly released iPhone15Pro series mobile phone uses titanium body, which increases the demand for machine tool processing time. At the same time, the sale of MR head in 2024 is of great significance to the recovery of virtual reality equipment market.
Machine tools and equipment have entered the upstream cycle of prosperity. The last high point of machine tool production in China was in 2011-2014, and the service life of machine tools is usually 10 years. At present, the stock machine tool market has entered a period of renewal and iteration. Superimposed by the trend of moderate macro-economic recovery in China this year, 3C, automobile and GM manufacturing industries have increased investment in fixed assets, opening up incremental space for machine tool equipment, and a new upward cycle of the machine tool manufacturing industry may be opened.
[investment advice]
Taking into account the business development of the company, we estimate that the revenue from 2023 to 2025 will be 4.809 billion RMB 54.13 billion RMB, and the net profit of homing mother will be 420 won 537 RMB 654 million respectively.
We use the relative valuation method to estimate the market capitalization of the company, and the comparable companies selected in the historical announcement are Haitian Seiko, Cod numerical Control, Newway numerical Control, Guosheng Zhike and Zhejiang Haiderman. The average Choice consensus profit forecast for comparable companies in 2023 is 31 times, so we give the company 31 times PE in 2023, corresponding to the target price of 7.76 yuan, with a "buy" rating for the first time.
[risk Tip]
Risk of fluctuation of macroeconomic and industry prosperity. The company's products are the upstream part of the manufacturing industry, and due to the impact of the Fed's interest rate hike on the global macro-economy and the macro-uncertainty brought about by the war between Russia and Ukraine, downstream enterprises may invest less in fixed assets than expected.
Industry competition aggravates the risk. The high-end products are occupied by overseas brands, and the domestic machine tool enterprises in the middle and low-end track compete fiercely. With the production capacity expansion of competitors, the company's products face the risk of intensified competition.
The risk of a weaker-than-expected recovery in consumer electronics. Global consumer electronics recovery inflection point is still not clear, downstream inventory after no clear signs of recovery, Apple Inc new products MR and iPhone15 market response may be lower than expected, adverse impact on the company's downstream 3C customers.
The risk of general equipment growth falling short of expectations. The company's customer expansion in the new energy field may encounter difficulties, the high growth rate of new energy vehicles is difficult to maintain for a long time, and the company's new products may not be able to compete with international leaders in the high-end market.