弘亚数控：国内家具机械龙头，引领国产替代进程

Investment Rating - The report gives a "Buy" rating to Hongya CNC (002833 SZ) with a target price of RMB 21 70 [2][3] Core Views - Hongya CNC is a leading domestic furniture machinery company with cross-cycle growth capabilities The company's products include edge banding machines CNC drills CNC panel saws and machining centers benefiting from product diversification and overseas expansion the company achieved a revenue CAGR of 25 7% from 2012 to 2023 [1] - The company's domestic market share continues to grow due to its competitive pricing and performance comparable to European brands with domestic revenue CAGR of 26 6% from 2015 to 2023 [2] - Overseas revenue has grown significantly with a CAGR of 31 7% from 2015 to 2023 and the company is expected to continue gaining market share in international markets [2] - Product upgrades and an expanding dealer network are key drivers of the company's competitive advantage [2] Financial Performance - In 2023 the company achieved record high revenue and net profit of RMB 2 68 billion and RMB 590 million respectively with a dividend yield of 6 8% [1][2] - The company's ROE has remained above 20% for the past five years except for 2022 and its net profit margin has consistently stayed above 20% [16][18] - The company's free cash flow was RMB 390 million in 2023 and RMB 90 million in the first three quarters of 2024 indicating healthy cash flow conditions [21] Domestic Market - The company's domestic revenue reached RMB 1 87 billion in 2023 significantly outperforming European competitors such as Homag China and Biesse Asia-Pacific [2] - The domestic furniture machinery market is entering an equipment renewal cycle with leading furniture manufacturers' fixed assets increasing by 16 7% YoY in H1 2024 [2] - The company's products are priced at 1/2 to 1/3 of European brands making them highly competitive in the domestic market [2] Overseas Market - Overseas revenue grew from RMB 90 million in 2015 to RMB 810 million in 2023 with a CAGR of 31 7% [2] - The company's overseas revenue in 2023 was RMB 810 million compared to Homag Group's RMB 10 42 billion and Biesse's RMB 5 31 billion indicating significant growth potential [2] - The company's overseas gross margin was 36 4% in 2023 and 36 6% in H1 2024 higher than its domestic gross margin [2] Product and Channel Strategy - The company has continuously upgraded its products through acquisitions and R&D with edge banding machine and CNC drill revenue CAGR of 19 8% and 31 4% respectively from 2012 to 2023 [2] - In H1 2024 the company launched its high-end brand "Kaiao" which has been well-received in the high-end market [2] - The company's global dealer network expanded from 90 in 2015 to over 120 in H1 2024 enhancing its market reach and brand influence [2] Profit Forecast and Valuation - The company's revenue is expected to be RMB 2 85 billion RMB 3 25 billion and RMB 3 75 billion in 2024 2025 and 2026 respectively with net profit of RMB 581 million RMB 658 million and RMB 777 million [2] - The company's PE ratio is projected to be 13x 11x and 9x for 2024 2025 and 2026 respectively [2] - The target price of RMB 21 70 is based on a 14x PE multiple for 2025 [2]