Huarui Precision(SH:688059)2024-02-06 08:14Market Overview - In 2022, China's tool market consumption reached approximately 46.4 billion CNY, with imports accounting for 12.6 billion CNY, indicating a significant reliance on high-end tools for modern manufacturing [3] - The proportion of imported tools in total consumption decreased from 37.17% in 2016 to 27.16% in 2022, reflecting an improvement in domestic CNC tool self-sufficiency [3] Raw Materials for Hard Alloy Tools - The primary raw materials for hard alloy tools are tungsten carbide powder and cobalt powder [3] - Tungsten carbide (WC) is produced from tungsten and carbon, widely used in various industries due to its hardness and high melting point [3] - Cobalt powder serves as a binder in powder metallurgy, providing toughness to hard alloys and is essential in high-temperature applications [3] R&D Investment - R&D expenses from 2020 to 2022 were 19.75 million CNY, 24.91 million CNY, and 41.56 million CNY, showing a consistent upward trend [3] - As of September 30, 2023, R&D expenses reached 46.28 million CNY, a 64.03% increase year-on-year, constituting 7.88% of operating revenue [3] Sales Model Development - The company primarily employs a distribution model supplemented by direct sales, enhancing its direct sales team and customer development efforts, particularly in the aerospace sector [4] - The shift towards direct sales necessitates rapid response to customer needs, raising demands on technical development and service capabilities [4] Project Impact on Business - The company's IPO and fundraising projects focus on high-efficiency drilling tools and solid carbide milling tools, addressing the growing demand for precision machining in modern manufacturing [4] - The implementation of these projects is expected to significantly enhance the company's competitive edge in precision machining and support its strategic goal of becoming a leading supplier of integrated cutting solutions in China [4] Market Expansion Plans - The company aims to strengthen product promotion and participate in major domestic and international high-end equipment manufacturing exhibitions to enhance its overall image [5] - Plans include optimizing domestic distribution channels and strategically positioning distributors around major industrial clusters to expand sales [5] Growth Potential for Tool Enterprises - The growth of CNC machine tools and the increasing penetration rate in the market suggest significant potential for tool consumption in China [5] - Domestic tool manufacturers are improving their capabilities through the assimilation of advanced foreign technologies, enabling them to provide customized cutting solutions and gradually replace high-end imported tools [5]