Qiao Feng Intelligence, a leading domestic metal cutting machine tool company, is only one step away from the landing of the public capital market.
Source: WIND
On June 21, 2024, Qiao Feng Intelligence, which specializes in the research and development, production and sales of CNC machine tools, opened a prospectus on the GEM, and the IPO company plans to raise 1.355 billion yuan, of which 770 million yuan will be invested in the construction project of CNC equipment production base, and 185 million yuan will be used for the construction project of R&D center, with the construction period of both projects being 24 months, and the rest will be used to supplement working capital.
At present, Qiao Feng Intelligent has been deeply involved in the CNC machine tool industry for more than 10 years, and has built a multi-faceted competitive barrier, the company has been in the forefront of the metal cutting machine tool segment industry, and the gross profit margin level is also stable higher than the average of comparable companies. In the future, with the return of industry demand and the promotion of localization rate, Qiao Feng Intelligence, which has upgraded its own technology research and development and production capacity, is returning to the high-speed channel of performance growth.
Source: Prospectus
01
A leading company in metal cutting machine tools that has built a number of competitive advantages
Qiao Feng Intelligent has been committed to the development of high-precision, high-reliability, high-efficiency, intelligent domestic modern "industrial machine tools", for the transformation and upgrading of intelligent manufacturing to provide higher quality CNC machine tools. The company's existing products include more than 80 kinds of medium and high-end models such as vertical machining centers, gantry machining centers, horizontal machining centers, etc., which are widely used in general equipment, consumer electronics, automobile and motorcycle parts, molds, construction machinery, military industry, energy, medical equipment, aerospace, 5G communications and other industries.
Part of the product display source: prospectus
Qiao Feng Intelligence, which has been deeply involved in the CNC machine tool industry for more than 14 years, has formed a number of core technologies in the five technical fields of CNC machine tool precision maintenance, reliability maintenance, core functional component research and development and application, control system application development, and efficient processing under complex working conditions, and has completed the research and development and cultivation of five-axis machining centers, high-end horizontal machining centers, lathes, grinding machines, and automated production lines, with 202 patents, including 25 invention patents. From 2021 to 2023, the company's R&D expenses will be 44.6691 million yuan, 56.3415 million yuan and 63.4197 million yuan respectively, which are in a continuous growth trend.
At the same time, the company's main machine tool production base is located in the Pearl River Delta and the Yangtze River Delta, the surrounding machine tool industry related supporting mature, the industrial chain division of labor is clear, the road network system is convenient, and it has the advantage of industrial clusters. On the supply side, the company has also formed long-term and stable cooperative relations with major suppliers such as international brands such as Fanuc, THK, and Siemens.
Based on this, the company serves more than 4,000 customers, has a wide range of customer groups, and is less affected by changes in a single industry or customer needs. According to the data released by the China Machine Tool Industry Association, in 2022, the company's machine tool revenue will account for about 1.23% of the market share of metal cutting machine tools in mainland China.
In addition, the company is also the third batch of "specialized, special and new little giant enterprises" announced by the Ministry of Industry and Information Technology of the People's Republic of China, and its products have won awards such as "Guangdong High-tech Products", "Guangdong Province (Industry) Famous Brand Products", "China Good Machine Tool Top Ten Brand Award", "China (Tianjin) International Equipment Manufacturing Expo Best Industrial Design Award" and other awards.
02
High gross profit margin highlights competitive strength
The 2024 performance returned to the growth trend
Although the performance of Qiao Feng Intelligent will be temporarily affected by the weak macroeconomic prosperity in 2023, the overall growth trend of the company's revenue scale is still significant.
According to the prospectus, the revenue contribution of the company's vertical machining center business increased from 368 million yuan in 2019 to 1.138 billion yuan in 2023, the revenue of gantry machining center business increased from 47 million yuan in 2019 to 159 million yuan in 2023, and the revenue of horizontal machining center business also increased from 15 million yuan in 2019 to 43 million yuan in 2023, and the three major business segments showed a strong growth trend. In terms of years, except for the slight adjustment of various businesses in 2023, the rest of the years have increased year-on-year, thus driving the company's total revenue from 456 million yuan in 2019 to 1.454 billion yuan in 2023, with an average annual compound growth rate of 33.63%.
On the profit side, Qiao Feng Intelligence has not been spared the rising cost of raw materials that has plagued various industries around the world in recent years, but the prospectus data shows that the gross profit margin of the company's main business from 2021 to 2023 will be 34.89%, 29.04% and 28.99% respectively, which are higher than the average of 27.36%, 26.66% and 25.97% of comparable companies, and are basically in the first/second position of comparable companies. Therefore, the company's net profit attributable to the parent company still increased from 59 million yuan in 2019 to 169 million yuan in 2023, with an average annual compound growth rate of 30.09%.
In addition, it is worth noting that since September 2023, the output of the machine tool industry has ended 17 consecutive months of decline, recovered and maintained growth, and the company's orders have also resumed growth, with new orders signed in the third and fourth quarters of 2023 being 428 million yuan and 461 million yuan respectively, a year-on-year increase of 18.63% and 23.75%, and the company will also achieve a return to the growth trend in 2024.
According to the prospectus, the company's revenue in the first quarter of 2024 increased by 5.12% year-on-year to 368 million yuan, the net profit attributable to the parent company increased by 31.66% year-on-year to 51 million yuan, and the net profit deducted from the non-attributable parent increased by 31.7% year-on-year to 50 million yuan, and the net profit increased significantly.
According to the company's forecast, the year-on-year growth rate of revenue in the medium term of 2024 will be in the range of 2.37% to 12.25%, and the year-on-year growth rate of net profit attributable to the parent company and net profit deducted from non-attributable to the parent will be in the range of 16.23% to 26.37% and 17.48% to 28.07%, maintaining a stable growth trend.
03
Multi-wheel factor driven
Future performance growth is expected
First of all, the output value of the global machine tool market is resuming growth.
According to the application classification, metal processing machine tools can be divided into metal cutting machine tools, metal forming machine tools and woodworking machine tools, of which metal cutting machine tools are the most important type of machine tools, accounting for about 2/3 of the total number of metal processing machine tools. According to VDW (German Machine Tool Builders Association) statistics, since 2000, the output value of the global metalworking machine tool industry has generally shown an upward trend, and in 2019 and 2020, the global output value has declined due to the impact of global public health events and trade environmental tensions. However, from 2021 to 2022, countries around the world will gradually resume production and operation, the adverse impact of global public health events on the economy will gradually be eliminated, and the output value of the global machine tool market will resume growth, reaching 596 billion yuan in 2022, an increase of about 35% over 2020.
Domestically, affected by the slowdown in macroeconomic growth in 2022, the output of metal cutting machine tools will be 572,000 units, a slight year-on-year decrease, and the output of metal cutting machine tools in 2023 will be 613,000 units, a year-on-year increase of 6.4%, ending 17 consecutive months of decline since September 2023, recovering and maintaining growth.
At the same time, the promotion of localization rate will provide sufficient impetus for the future development of Qiao Feng Intelligence.
In recent years, Continental has vigorously promoted the development of the CNC machine tool industry, and continuously improved the technical level requirements for CNC machine tools. It should be known that in 2023, the numerical control rate of China's metal cutting machine will only be 45.5%, compared with the 80% numerical control rate of developed countries, there is still a lot of room for improvement, and the localization rate of high-end CNC machine tools is only 6%. As a leading domestic supplier of CNC machine tools in China, Qiao Feng Intelligent will directly benefit.
Moreover, the company has also expanded to the application field of aluminum die casting molds for new energy vehicles, and has now completed the technology and product reserves of the corresponding models.
Considering the development trend of electrification and lightweight of new energy vehicles, and the characteristics of relatively low-density aluminum die-casting parts for body structural parts and spare parts of the "three-electric" system, the company has developed a single-column vertical and horizontal composite machining center and a high-speed and high-efficiency vertical machining center in advance, using a 12,000rpm spindle and a large-lead ball screw, and the fuselage structure is designed with lightweight and high-rigidity structure to meet the requirements of large-scale and efficient processing of aluminum die-castings, and the related technologies have been patented.
According to the "Technology Roadmap for Energy-Saving and New Energy Vehicles 2.0" released by the Society of Automotive Engineers of China in 2020, the lightweight coefficient of pure electric passenger vehicles is required to be reduced by 15%, 25% and 35% respectively in 2025, 2030 and 2035; As a cost-effective lightweight material for automobiles, the increase in demand for aluminum die castings can effectively promote the upgrading of casting molds and related machine tools.
In this context, the capacity utilization rate of Qiaofeng Intelligence's core products has been at full capacity in recent years. According to the prospectus data, the capacity utilization rate of the company's core product vertical machining center from 2021 to 2023 will be 119.72%, 103.93% and 96.48% respectively, which is already in a highly saturated state.
Source: Prospectus