Himile Science And Technology(SZ:002595) GF SECURITIES·2024-08-13 03:32Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 41.93 CNY per share based on a 2024 PE valuation of 18 times [3]. Core Insights - The company is a global leader in tire mold manufacturing, showing stable performance growth. It has rapidly grown since entering the tire mold production market in 2002 and is a qualified supplier to major tire manufacturers like Michelin, Bridgestone, and Goodyear. The tire mold industry has high barriers to entry, and the company is expected to continue expanding its market share, with projected mold business revenue of 3.79 billion CNY in 2023 [1][24]. - The company is extending its reach into upstream mechanical components, including gas turbine and wind power casting businesses. The demand for gas turbines is expected to rise due to the increasing need for peak shaving in the new energy sector, while the wind power sector is anticipated to grow significantly by 2024-2025. The revenue from large mechanical components is projected to be 2.77 billion CNY in 2023, accounting for 38.65% of total revenue [1][24]. - The company is actively promoting the localization of CNC machine tools. It has developed significant know-how in machine tool manufacturing since its inception, and its subsidiary successfully began external sales in 2022. CNC machine tool revenue is expected to become a key growth driver, with 308 million CNY reported in 2023 [1][24]. - Revenue and profit forecasts indicate a positive growth trajectory, with expected revenues of 8.27 billion CNY, 9.22 billion CNY, and 10.06 billion CNY for 2024, 2025, and 2026, respectively. Net profits are projected to be 1.86 billion CNY, 2.10 billion CNY, and 2.30 billion CNY for the same years, with an EPS of 2.33 CNY, 2.62 CNY, and 2.87 CNY [2][24]. Summary by Sections Company Overview - The company has undergone three significant business transitions, establishing itself as a leader in tire molds and expanding into precision casting and CNC machine tools. It has developed a comprehensive product matrix and maintains long-term partnerships with over 20 Fortune 500 companies [1][24][20]. Tire Mold Business - The tire mold market is projected to reach a scale of 100 billion CNY, with high customization requirements creating substantial barriers to entry. The company has a strong competitive position due to its quality clients and technological advantages, leading to continuous market share growth [1][24][41]. Large Mechanical Components - The company has expanded into the large mechanical components sector, focusing on gas turbines and wind power. This segment is expected to contribute significantly to revenue growth, with a strong competitive edge anticipated in these markets [1][24]. CNC Machine Tools - The CNC machine tool segment is positioned for growth, with the company leveraging its extensive experience in machine tool development. The market for high-end CNC machine tools in China is expected to grow, providing further opportunities for the company [1][24]. Financial Performance - The company has shown steady revenue growth, with a compound annual growth rate (CAGR) of approximately 15.7% from 2017 to 2023. The revenue for 2023 is reported at 7.166 billion CNY, with a net profit of 1.612 billion CNY [2][24][27].