The investment in the machine tool sector was at the time

According to the "Special Plan for the Development of CNC Machine Tools", by 2010, domestic CNC machine tools will account for more than 50% of the domestic market demand. It is expected that the compound annual growth rate (CAGR) of domestic machine tool output during the 11th Five-Year Plan period will be 15-20. %about. We believe that although the valuation of leading companies in China's machine tool industry has approached or exceeded that of similar international companies, the good growth has allowed the stock price to still have room to rise, and the industry investment rating has been upgraded to “overweight”. It is recommended to focus on G-sinking and G-Qin development.

The machine tool industry needs to be developed

The machine tool is the basic production equipment of the machinery industry, the working machine of all mechanical and electrical products, and it is a technology-intensive, capital-intensive and talent-intensive industry. To revitalize the equipment manufacturing industry, we must first revitalize the machine tool industry, especially the development of domestic CNC machine tools. However, the actual situation is that the import value of China's machine tools is much larger than the export value, the deficit is close to 5 billion US dollars, and the import dependence is more than 60%. The value of machine tool imports has risen from $2.4 billion in 2001 to $6.5 billion in 2005, an increase of nearly 1.7 times.

A large number of imported high-end CNC machine tools are mainly used in the following three areas: First, high-tech and defense industry, such as aerospace, ship, rail transit and nuclear industry, the five-axis linkage high-speed heavy duty specialization required for key parts processing Chemical or special CNC machine tools, high-speed milling machines for turbine disks, etc. Second, major basic equipment manufacturing fields, such as large-scale power generation equipment, large-scale construction machinery, petrochemical and metallurgical equipment, large and heavy-duty composite machining CNC machine tools. Third, the national economy pillar industry, such as automotive manufacturing, IT manufacturing and mold manufacturing, and other high-efficiency precision CNC machine tools.

It can be seen that the key technologies of high-end CNC machine tools and corresponding high-performance functional components will be strengthened, and the R&D and production capacity of high-performance large-duty CNC machine tools, high-efficiency precision CNC machine tools and ultra-precision CNC machine tools will be strengthened. Important tasks to be completed.

Growth determines the value of investment

We believe that the "10th Five-Year Plan" is a period of rapid development of CNC machine tools in China. During this period, the production and consumption of CNC machine tools in China have surged. The "Eleventh Five-Year Plan" will be a period of steady development of China's machine tool industry. According to the latest forecast of China Machine Tool & Tool Industry Association, the total industrial output value and product sales revenue of the whole industry will reach 150 billion yuan in 2006, an increase of about 15% over the previous year. The export value of machine tool products is expected to be around 3.5 billion US dollars, of which the export value of metal processing machine tools will approach 1 billion US dollars. It is also predicted that the growth rate of China's machine tool products imports will not be too large in 2006, the import value is expected to be around 11 billion US dollars, of which the import value of metal processing machine tools will remain at about 7.5 billion US dollars.

According to the "Special Plan for the Development of CNC Machine Tools", by 2010, domestic CNC machine tools will account for more than 50% of the domestic market demand. It is expected that the compound annual growth rate (CAGR) of domestic machine tool output during the 11th Five-Year Plan period will be 15-20. %about.

Although the valuation of leading Chinese machine tool companies has approached or exceeded them compared with international machine tool companies, the good growth has not fully reflected its value. As China's leading machine tool companies are currently in a period of growth, the annual profit-to-value ratio (CAGR) of net profit will exceed 30% in the next three years, so it is reasonable to give companies 30 times PE. Although many machine tool companies have seen large gains in their stock prices, we believe that there is still much room for growth in the market.

Focus on individual stocks

G Shenji (000410): The company is a leading enterprise in China's CNC machine tool industry. In 2005, Shenyang Machine Tool (Group) Co., Ltd. has an annual output of more than 10,000 CNC cutting machines, reaching 1,008 units, accounting for 16.8% of the country's total output. It has become the world's largest CNC cutting machine.

This year's mid-year report showed that the company's main sales revenue in the first half of the year was 2.519 billion yuan, up 23.69% year-on-year; net profit was 61.32 million yuan, up 45.80% year-on-year; machine tool output was 32,774 units, up 6.53% year-on-year, of which CNC machine tool output was 5850. Taiwan, an increase of 45.7%. We expect the company's earnings per share from 2006 to 2008 to be 0.57 yuan, 0.77 yuan, and 0.92 yuan respectively. If the valuation is 30 times the price-earnings ratio, its reasonable value should be 17-23 yuan, and the investment rating is "overweight."

G Qin Development (000837): The company is a leading company in the field of precision machine tools in China. The company's grinding machine tools occupy more than 70% of the market in China. The independently developed machining centers are aviation, aerospace, electric motors, bearings, metallurgy. Major key equipment that is urgently needed by the industry. The group company has 13 professional research institutions, and R&D investment accounts for more than 6% of annual sales revenue. Based on independent breakthroughs in major key technology research and development, precision manufacturing, integrated assembly, and numerical control transformation and upgrading, the company has formed a patent for the establishment of the system. The system has more than 40 patents, and is responsible for or participating in the formulation of more than 60 technical standards in the same industry.

Affected by production capacity, the company's growth rate has slowed down. In the middle of this year, the company achieved a revenue of 294 million yuan from the main business, a year-on-year increase of 9.68%; a net profit of 2,409,340 yuan, an increase of 3.12%. We expect the company's earnings per share for 2006-2008 to be 0.25 yuan, 0.35 yuan, 0.45 yuan, according to 30 times price-earnings ratio valuation, its reasonable value should be 7.5-10.5 yuan, investment rating is "overweight."

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