China's short-term target price of Xinda Internati

2022-08-17
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Cinda International: the short-term target price of Tianjin Shanghai machine tool in China is 7.6 yuan, with a potential increase of 13.4%

factors:

I) the group is mainly engaged in the manufacturing and sales of numerical control high-precision machine tools (CNC) of Tsugami brand. In 2016, the group ranked fourth in China's CNC high-precision machine tool industry, and when subdivided into the precision automatic lathe market, it accounted for 34.8% of the market share, ranking first in the industry. The sales ratio of China's CNC high-precision machine tools in 2016 was only 24%, which was still lower than that of Japan. The products met the relevant requirements of tensile stress relaxation test of steel at room temperature in gb/t 10120 (1) 996 test method for stress relaxation of metals and ASTM E328 (2) 008 test method for stress relaxation of materials and structures. The average ratio of Germany and the United States was about 62% during the period, With the continuous upgrading of the product structure of downstream customers in the domestic machine tool industry (such as automobiles and consumer electronics products), the demand side has higher requirements for the accuracy of machine tools, and the company has implemented a modern enterprise management system

ii) the group's revenue and net profit in 2017/18 fiscal year increased by 41%/72% year-on-year to 2.31 billion yuan and 190 million yuan respectively, and the gross profit margin during the period increased by 260 pips to 20.4% year-on-year, mainly benefiting from the increase in production and sales during the period, bringing economies of scale. Under the continuous increase of labor costs in the mainland and the imitative signal control of this kind of mechanical and electrical equipment, the group's future sales are expected to continue to improve under the development strategy of "made in China, receiving 35000 professional visitors in 204 days... The 25th China Plastics Fair, held at Taizhou International Convention and Exhibition Center from October 12 to 15". In addition, if the group receives orders from international customers again, it is expected to become a catalyst for the rise of share prices

iii) the current price is equivalent to about 11 times the predicted P/E ratio in 2018/19 fiscal year, while the average valuation of Hong Kong, mainland listed peers and Japanese leading enterprises is above 20 times. With the improvement of market awareness of the group, their valuation can be revalued and the gap with peers can be narrowed

iv) the stock price fell to 6.0 yuan earlier and now supports the recovery. On the 14th, RSI has been oversold and rebounded, and the "bull gap" of MACD signal line has expanded, which is conducive to the rebound of stock price

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