Huarui Precision(SH:688059) Huaxin Securities·2025-09-25 05:12Investment Rating - The report assigns a "Buy" investment rating for the company, marking its first coverage [9]. Core Insights - The company is positioned as a leader in the domestic high-end cutting tool market, with significant technological capabilities and a strong focus on R&D, which opens up growth opportunities [4][6]. - The domestic cutting tool industry has shown a notable shift towards local production, with the market share of imported tools decreasing from 37% in 2016 to 21% in 2023, indicating accelerated domestic substitution [4]. - The company aims to expand into high-growth sectors by diversifying its product lines into new materials and applications, thereby creating a second growth curve [5]. - The company has a robust pipeline of R&D projects, with a total of 118 intellectual property applications, of which 89 have been authorized, indicating a strong commitment to innovation [8]. Summary by Sections Market Performance - The cutting tool market in China reached a size of 49.2 billion yuan in 2023, with a growth rate of 6.12% [4]. Company Overview - The company has established itself as the second-largest producer of hard alloy CNC blades in China, with a comprehensive product technology system catering to various high-end manufacturing sectors [5]. Financial Forecast - Revenue projections for 2025, 2026, and 2027 are 9.51 billion yuan, 11.79 billion yuan, and 14.47 billion yuan, respectively, with corresponding EPS of 1.84 yuan, 2.46 yuan, and 3.22 yuan [9][11]. - The current stock price corresponds to a PE ratio of 42.6, 31.9, and 24.3 for the years 2025, 2026, and 2027, respectively [9].