The tool industry is a basic industry in the machinery manufacturing industry and major technical fields. Cutting accounts for about 90% of the entire machining workload, and according to different tool materials, industrial cutting tools can be mainly divided into four categories of products: high-speed steel, cemented carbide, ceramics and superhard materials.
With the continuous development and upgrading of the mainland's manufacturing industry, the downstream industries involved in the continuous expansion, and the mainland's demand for tools has also increased. According to the data of the China Machine Tool Industry Association, the size of the mainland tool market has increased from 13.74 billion in 2005 to 46.4 billion in 2022, with a CAGR of about 7.42%.
The upgrading of the manufacturing industry has brought about an incremental market, and domestic substitution has helped the company's revenue to maintain a high growth rate The performance of tools has a great impact on the quality and production efficiency of machining, and CNC machine tools and high-efficiency tools have developed in tandem. Europe, America, Japan and South Korea and other manufacturing powers attach great importance to the coordinated development of CNC machine tools and high-efficiency tools, and the annual tool consumption scale is nearly 50% of machine tool consumption, while the proportion in mainland China in 2019 is only 18%, and there is a large gap with developed countries abroad.
The numerical control rate of continental machine tools is close to 45%, and there is a lot of room for improvement. The numerical control rate of metal cutting machines in China has shown a steady growth trend, from 29.7% in 2010 to 44.9% in 2021
The entry threshold of the CNC tool industry is high, and the company has advantages such as technical experience. Compared with the traditional tool industry, the CNC tool industry has higher requirements for the company's R&D capital investment, technology accumulation and innovation ability.
At the same time, the development of cemented carbide and cermet tool business, the use of investment and mergers and acquisitions, the acquisition of Xinjinquan, broaden the downstream application industry and market areas, enhance the comprehensive competitiveness of the company's tool business. In the future, the industry concentration in the field of CNC tools will increase, and the company is expected to occupy a place in the hard CNC tool market with the release of production capacity and new products.
The company's superhard tools are deeply engaged in the field of superhard tools and have a number of core technologies. As of 2022, the company has a number of core technologies, including superhard material laser micro-nano precision machining technology, vacuum application technology, ultra-thin diamond sheet and composite sheet precision grinding and mirror polishing technology, automation equipment development technology, cemented carbide CNC tool manufacturing technology, CVD lab-grown diamond growth technology, etc., and continues to improve.
The company has formed a series of systematic superhard tool design and production technology, and maintains a leading technology in the processing of quenched steel, cast iron, powder metallurgy and aluminum alloy. At present, the company's superhard tools occupy a high market share in the field of consumer electronics display, precision machining in the 3C industry, automotive field, wind power and other fields. The products cover wind power bearings, hub bearings, ball screws, ball cages, new energy gearboxes, cemented carbide abrasives and other subdivided application fields. In terms of new energy vehicles, it can meet the efficient processing of key components such as motor housings, reducer housings, heat pump integrated valves and suspension swing arms for automobile processing manufacturers. We believe that in the future, with the development of the mainland manufacturing industry to a more high-end and intelligent, the tool market will be further cleared, the concentration will continue to rise, and the company's market share may be further improved.
The market demand for humanoid robots may further open up growth space for the company.
In 2023, with the rapid development of the humanoid robot industry, the company will grasp the development trend of the industry and actively invest in the research and development of ball screw nut processing and planetary roller screw milling and other related tools. We believe that the company has a deep reserve and rich experience in precision machining tool technology. If the company's related product research and development is successful, it will further open up the company's growth space, and the company's revenue growth rate is also expected to be greatly improved.
The company is in a leading position in the superhard tool industry, and will benefit from the recovery of the domestic economy, the recovery of downstream industry demand, the accelerated development of the manufacturing industry to high-end and intelligent, the enhanced demand for domestic substitution, and the performance increment brought by the launch of the company's new products in the future.
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