Sifangda's in-depth report: performance growth is key in high-end products

1. Leading enterprises in the composite superhard materials industry, based on the high profit link of the industrial chain

The company is the largest polycrystalline diamond research and development and production enterprise in China, and is also the manufacturer with the most complete varieties and specifications. It has advanced technology and strong product competitiveness. The comprehensive performance advantages of polycrystalline diamond are outstanding, and the replacement of cemented carbide is the trend. The continuous technological breakthrough makes the import substitution progress steadily. The company is located in the middle and lower reaches of the industrial chain, benefiting from the adequacy and price reduction of single crystal raw materials, large import substitution space, outstanding technical advantages, market share in the domestic first and downstream industries with low concentration. The leading products of composite superhard materials are still expected in the future. Maintain a higher gross margin relative to single crystals and articles.

Second, capacity and growth rate and profitability determine the future development of oil and tool composites

From the perspective of market capacity and growth rate and profitability, the company will focus on the development of composite sheets for petroleum and tooling in the future: (1) Composite sheets for petroleum: in 2011, the global capacity is about 8-140 billion yuan, and the capacity in China is 4- 700 million yuan, the demand growth rate in the next few years is expected to remain above 20%. (2) Composite blades for tools: In 2015, global capacity may reach US$3.6-7.2 billion. In 2012, China's capacity will reach 2.2 billion yuan, and it may reach 4.3-4.8 billion yuan in 2015. The demand growth rate in the next few years may reach 25%-30%. (3) Composite sheets for mines: In 2012, the global capacity will reach 13 billion yuan, but the growth rate in the future is only about 5%. (4) Drawing die blank: It is estimated that China's capacity will be 2.3 billion yuan in 2012, and the future growth rate will be about 10%. The profitability of the company's oil and tool composites and drawing die blanks is significantly stronger than that of mine composite sheets. The gross profit margin of composite sheets for petroleum and cutting tools is about 40%, the high-grade drawing blanks are about 70%, and the mining composite sheets are about 30%. .

Third, high-end oil and large-diameter cutting tools with large volume, is expected to bring high growth

In 2012, the company focused on the promotion of high-end petroleum composite sheet-HR tooth, which is the highest-end product of petroleum composite sheet. It is mainly used for import substitution, and the gross profit rate of petroleum composite sheet will be further improved. The composite sheet for large-diameter tools is the focus of future development. At present, the 50.8mm tool composite sheet has been supplied in small quantities, and the product quality has been comparable to the world advanced level. With the continuous marketing of high-end composites for petroleum and large-diameter tools, the company's performance is expected to usher in a period of rapid growth.

Fourth, profit forecast and investment advice:

The company's 2012-2014 EPS is expected to be 0.32 yuan, 0.42 yuan and 0.58 yuan respectively. According to the latest stock price on September 28, 2012, the dynamic PE for 2012-2014 is 40.69 times, 31.21 times and 22.68 times. In the previous period, the company's share price was driven by the shale gas concept. The relative yield was obvious. The space for continued rise in the short term was relatively limited. We temporarily gave the company a “hold” rating, but we are optimistic about the company's technological advantages in the composite film market and high-end oil. And the increase in the number of composite sheets for the tool gives the company a significant increase in performance. It is recommended to continue to focus on the company's development.

V. Risk warning:

The market promotion progress of high-end oil and tool composite sheets was lower than expected; the increase in single crystal prices led to a sharp decline in product gross margin; macroeconomic growth continued to decline, and downstream demand continued to slump.

Product name:Umbrella Frame Steel Wire

Standards:

GB 3206-82 Carbon Constructional Quality Steel Wire

JIS G 3521-1991 Hard Drawn Steel Wire

YB/T 5005-93 Steel Wire For Spoke

 

Diameter: 1.75-5.00mm

 

Usages: Umbrella Frame Motorcycle Spokes, Bicycle Spokes, ect.

 

Material: 30#, 35#, 30Mn, 40#, SWRH42A,SWRH 42B, 45#, 50#, 55#

Umbrella Frame Steel Wire

Umbrella Frame Steel Wire,Steel Frame Golf Umbrella,High Quality Umbrella Frame Steel Wire,Outdoor Umbrella Frame Steel Wire

TAIXING HONGYE STEEL WIRE MANUFACTURING CO.,LTD , http://www.steeltr.com