Everbright Securities: Boshen tool high-speed rail brakes value geometry?

Based on the leading position in the field of diamond tools and metallurgical powder materials, the company has started research on brake pads for EMUs many years ago. It has developed brake pads for EMUs and passed the test environment verification. At present, it is only waiting for the Ministry of Railways to demonstrate and Car test. It can be said that everything is ready, only owe the wind.

The brake pads of the EMU are consumables, and the gross profit margin is extremely high. According to our quantitative calculation, the market capacity of the EMU brake pads in 2012 and 2015 is 3.7 billion and 7 billion respectively. As the leading manufacturer in China, Boshen Tools is expected to share high-speed rail meals.

The traditional diamond tool business is progressing smoothly, and 2011 will be the year of performance release.
The demand for global diamond tools is growing at around 15% per year. In 2008, the global diamond tool market capacity has reached approximately $20 billion. China is undertaking global industrial transfer, and the industry's capacity growth is huge.

The company's listed investment projects began to partially reach production last year. In 2011, with the full production capacity, the company's performance will increase rapidly. Beginning in 2011 will be the year of performance release.

Power tool business is expected to continue to double
At present, the domestic power tool industry is growing at an average annual rate of 12%. As of 2008, the market capacity of China's professional power tools reached RMB 4 billion. The growth of the whole industry is stable and the market potential is huge.

With the advantages of channels and technology, power tools will be the key business of the company in the next few years. With the launch of multiple varieties next year, the product line will be greatly improved, and relying on continuous improvement of sales channels, it will effectively satisfy customers' one-stop procurement. The planned sales doubling target for 2-3 years is not difficult to achieve.

Quality company, stock price has 50% space
It is estimated that the company's 2010-2012 net profit compound growth rate reached 51.0%. Consider the growth of the industry and the explosive growth of the company's subsequent power tools and high-speed rail brakes.
 

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