KEDE Numerical (SH:688305) Donghai Securities·2024-05-19 08:00Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment opportunities [55]. Core Insights - The company is a leading domestic manufacturer of high-end five-axis CNC machine tools, with a focus on high-end CNC systems and key functional components. It has achieved a full industry chain layout for high-end five-axis CNC machine tools [56][57]. - In 2023, the company reported revenue of 4.52 billion yuan, a year-on-year increase of 43.37%, and a net profit of 1.02 billion yuan, up 69.01% year-on-year. The gross margin and net margin were 46.03% and 22.49%, respectively, reflecting improvements in product structure and growth in overseas business [56][57]. - The company has a significant market share in the five-axis CNC machine tool sector, with its sales share increasing from 15.33% in 2017 to 25.07% in 2021, indicating a trend towards domestic substitution for high-end machine tools [7][56]. Summary by Relevant Sections Company Overview - The company has been focused on the development of five-axis CNC machine tools for over 20 years, establishing itself as a leader in the domestic market [56][65]. - The core team is experienced, with a strong emphasis on technological talent and innovation, which has led to the successful development of high-end CNC systems and machine tools [69]. Market Potential - There is a significant import substitution opportunity in the five-axis CNC machine tool market, with only about 10% domestic market penetration for high-end machine tools. The demand for high-end machine tools is expected to grow, driven by government policies and the rise of high-end manufacturing sectors [57][58]. - The domestic high-end machine tool market is projected to reach 20 billion yuan by 2027, supported by increasing demand from industries such as aerospace, automotive, and military [57][58]. Financial Performance - The company has shown robust financial growth, with a projected net profit of 1.55 billion yuan in 2024, 2.34 billion yuan in 2025, and 3.31 billion yuan in 2026, reflecting a strong growth trajectory [59]. - The company has a healthy order backlog, with 290 million yuan in orders as of mid-2023, indicating strong demand for its products [14]. Competitive Position - The company's core components are self-supplied, which helps mitigate upstream cost pressures and enhances product quality and profitability [11]. - The performance of the company's high-end CNC systems is comparable to international leaders, positioning it well in the competitive landscape [58][59].