The hottest Kunming Machine tool enters the adjust

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Kunming Machine Tool entered the adjustment period

the company began to develop high-end machine tool products as early as 10 years ago. Recently, driven by the financial crisis, the company has accelerated its march into the high-end field of machine tools and will establish a new production base for the manufacturing of high-end machine tools. According to the company's operating conditions and business plans, the future valuation of the company is attractive

the industry has warmed up, but the strength is limited.

since the beginning of the year, with the large-scale launch of 4trillion investment and the improvement of the outlook of domestic automobile manufacturing industry, the demand for machine tools in domestic machine tool downstream industries has gradually warmed up, and the domestic machine tool manufacturing industry has benefited from it, and the industry as a whole has slowly warmed up. However, although the downstream demand is basically growing gradually, the growth rate has declined significantly year-on-year, which has brought difficulties to the sales of the machine tool manufacturing industry, and the industry generally presents a situation of phased overcapacity. It should be noted that this excess is mainly the excess capacity of low-end products, and the demand for large, heavy, high-precision, CNC products is still strong. This forces enterprises in the industry to adjust their product structure to adapt to the market

the company's current orders have not increased significantly; Inventory still needs to be digested

due to the tepid downstream demand, the company's order receiving situation in recent months is also tepid, and orders have not increased significantly year-on-year. Since the company's sales revenue in the first half of this year fell by 18% year-on-year, and the order receiving situation in the third quarter is also relatively general, it is expected that the company's revenue this year will be difficult to exceed the level of 2008 (even if the orders increase in the fourth quarter, according to the six-month production cycle, the delivery and revenue can only be confirmed in the first half of next year)

in the survey, it is found that the square next to the company's workshop is still full of all kinds of packaged finished machine tools. It is understood that some of these inventories are delayed by downstream users, and the time of picking up depends on the operating conditions of customers. We believe that the company's inventory digestion speed ultimately depends on the recovery speed of domestic and foreign macro-economy

the company has taken great steps in adjusting the product structure

the company was founded in the period of the Republic of China. It has been 70 years. It is one of the "Eighteen Arhats" in the domestic machine tool industry. It is mainly engaged in horizontal milling and boring machines. It is the core manufacturer of domestic horizontal milling and boring machines. The domestic market share of horizontal milling and boring machines reaches 30%. In the late 1990s, the company began to develop new products - floor type milling and boring machines. Compared with horizontal milling and boring machines, floor type milling and boring machines are large-scale high-end products. Due to the large domestic market demand for floor type milling and boring machines, the company's product has developed rapidly after its launch, and the domestic market share has gradually increased from 0 to about 30%, and the proportion of the new product revenue in the company's main revenue has also increased from 0 to 61%. Around 2006, the company reviewed the situation and began to develop heavy-duty floor type milling and boring machines. At present, the first product has been delivered to users

floor type boring and milling machine is the fastest-growing product of the company in the past few years, and its gross profit rate is also significantly higher than that of ordinary horizontal boring and milling machine. In the context of the depression of the industry in the first half of 2009, the sales revenue of floor boring still increased by 48.13%, accounting for 70% of the main revenue. At present, the main competitors in the industry include Qi'er, Wuzhong, Shenyang Machinery, Haitian, etc., and the market share of the company is about 25% - 30%. Together with Qi'er, it is the two companies with the largest share in the industry, and the market share is still expanding, At present, with the increase of new entrants, the competition in the floor boring market is becoming increasingly fierce. The company's main floor boring products now include tk6916, tk6919, TK6920, tk6926, etc., with the price ranging from 5 million to 20 million

horizontal boring and milling machine is the traditional product of the company, and the product has been highly mature. Affected by the economic crisis, the sales revenue of horizontal boring machine decreased by 48.27% year-on-year in the first half of the year, accounting for 25% of the main revenue. At present, the main competitors in the industry include Qinchuan development, Shenyang Machinery, Qinghai Huading, Hanchuan, Zoje, etc. the company in Qinchuan and Shenyang Machinery belong to the first tier of the domestic horizontal boring industry, with a market share of about 30%. At present, the main products with good sales of horizontal boring machines are th6111, th6111c-2, th6113, th6113c-2, etc. the main products sell at prices ranging from 400000 to 1million according to different models and configurations

affected by the financial crisis, the demand for ordinary machine tools in domestic and foreign markets has shrunk significantly in the past year, while the demand for large, heavy and high-end machine tools has not decreased. To this end, the company has accelerated the pace of transferring to the high-end. The company has begun to develop the gantry milling and boring machine, and has purchased about 600 mu of land in the suburbs of Kunming, km away from the existing production base, for the production of large, heavy-duty high-end

product parts and assembly of the whole machine. The new base will be built by stages according to the progress of market recovery. At present, the land leveling in the early stage has begun. According to the construction cycle, we expect the new base to generate revenue from 2011. Beiyi CNC is the leader in the Longmen milling market, with a market share of more than one third. Wuzhong, Jier and Shenzhong also occupy a place in this market. The company plans to become the main supplier of Longmen milling through three years of efforts in 2009-11

although the company is striving to enter the high-end field of machine tools, there is no plan to give up the production of ordinary horizontal milling and boring machines in the coming years. Before 2011, the revenue growth of the company will mainly depend on the sales growth of existing new and old products under the existing production capacity; After 2011, the growth of the company's revenue will mainly rely on the growth of production and sales of high-end products

the average gross profit rate is expected to continue to rise

in the first half of 2009, the average gross profit rate of the company was 35.77%, an increase of 0.6 percentage points year-on-year, mainly due to the adjustment of the company's product structure, the increase in the proportion of high-end products, and the decline in the cost of steel and other products. In recent years, with the increase of the proportion of the company's high-end product revenue, the company's overall gross profit margin has also increased. With the increase of the proportion of high-end products, the proportion of production costs such as raw materials in revenue will decline, and the shadow of raw material price fluctuations on gross profit margin will gradually weaken. In the next few years, with the further transfer of the company's products to the high-end, we expect the average gross profit margin of the company to further improve

Shenyang Machinery Group currently has no integration plan

Shenyang Machinery Group currently controls Shenyang machine tool and is the second largest shareholder of the company. Shenyang Machinery Group has great influence on the operation of the company. The company competes directly with Shenyang machine tool in some product fields. However, as far as we know, Shenji group currently has no users who can choose the integration plan based on their own situation in the selection process

subsidiaries will continue to divest and integrate

the company has many holding subsidiaries or joint-stock companies in the charge discharge cycle characteristics of trial batteries. Some of its subsidiaries have the same or similar business as the parent company, while others are different. In 2008, the company transferred the equity of "Siyuan intelligent appliance" among them, and it will transfer the equity of "Kunji automatic machine" around the end of 2009. The disposal of other companies will also depend on the operating conditions

profit forecast and investment rating

according to the company's operating conditions and business plans, we expect the company to achieve operating revenue of 1.6 billion yuan and 2 billion yuan respectively in 2009 and 10, and achieve eps0.56 yuan and 0.70 yuan respectively. At present, the corresponding dynamic P/E ratio is 21 times and 17 times respectively. According to our development expectations for the company in the coming years, we believe that the insulation effect and use effect have been verified, and the reasonable dynamic P/E ratio of the company in 2010 should be times. At present, the valuation of the company in 2010 is attractive, giving it a rating of "outperforming the market"

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