The first semi-annual report of Changling Hydraulics after its listing was released: net profit of 120 million yuan The stock price rose by 36.50% in half a year.

As a high-tech enterprise specializing in the key components of hydraulic components for construction machinery, Changling Hydraulics (605389, SH) released its first semi-annual report 5 months after listing, and from January to June 2021, the company achieved operating income of 519 million yuan, up 29.03% over the same period last year; the net profit attributable to the mother was 120 million yuan, up 3.71% year-on-year.

According to the 2021 semi-annual report, this year's industry exports are growing rapidly, the international market demand for construction machinery rigidity has increased, benefiting from the strong demand of the parade market, the main products of long-term hydraulics, central slewing joints, tensioning devices, etc. With the core competitiveness of products, market influence and customer reputation, the sales volume of each product has increased by a certain extent.

Excavators are the leading scale of the construction machinery industry, but also a more core category, according to the China Construction Machinery Industry Association industry statistics, from January to June 2021, a total of 223,800 excavators were sold, an increase of 31.3% year-on-year, of which domestic sales of 193,700 units, an increase of 24.3%; exports of 30,100 units, an increase of 107%.

Listed for 5 months, the stock price has risen by 36.50%

According to public information, Changling Hydraulics was established in 2006 with a registered capital of 97.33 million yuan, is a high-tech enterprise with independent intellectual property rights, research and development, production and sales of key components of hydraulic hydraulic components for professional construction machinery, the main products are construction machinery hydraulic central slewing joints, hydraulic track tensioners, hydraulic valves, etc.

Benefiting from the influence of multiple factors such as product upgrading and environmental protection upgrades, the construction machinery industry continued to maintain a high degree of prosperity in the first half of this year, and excavators have become the main application areas of long-age hydraulics at present, central slewing joints and tensioners. Among them, the operating income of the tensioning device was 292 million yuan, the revenue accounted for 56.31%, the gross profit margin reached 30.97%, and the operating income of the slewing joint was 206 million yuan, the revenue accounted for 39.65%, and the gross profit margin reached 39.90%.

At the same time, with the downstream customers Sany Heavy Machinery, XCMG Group, Zoomlion, LiuGong Machinery and a number of leading enterprises in the industry to complete the domestic import substitution, began to move from China to the world, bringing new development opportunities to the development of long-term hydraulics.

In the first half of this year, the operating cost of long-term hydraulics was 337 million yuan, mainly due to the huge increase in raw material prices, and raw materials accounted for a large proportion of the company's operating costs, and the raw materials required for the company's production were mainly steel and steel processing parts, so the price fluctuations of steel had a certain impact on the company's costs. The main products of long-age hydraulics have strong competitive advantages in the field of segmentation, and have certain bargaining and cost pass-through capabilities. At the same time, due to the certain lag in the time of raw material prices and their changes, their impact on the stability of the company's operating performance will be less than their own changes.

Changling Hydraulics said that it will reduce the impact of rising raw material prices on the company and enhance the company's market competitiveness by: (1) integrate resources to reduce management costs; (2) introduce high-end production equipment to improve the level of technology; (3) preferential suppliers to control procurement costs; (4) introduce new processes to reduce raw material losses; (5) negotiate price increases with downstream customers.

On December 10, 2020, with the approval of the China Securities Regulatory Commission's "Reply on Approving the Initial Public Offering of Shares of Jiangsu Changling Hydraulic Co., Ltd." (Securities Regulatory Approval [2020] No. 3391), Changling Hydraulics issued 24.3334 million A-share shares for the first time, with a total share capital of 97.3334 million shares after the issuance, and the issue price was 39.40 yuan per share. On March 22 this year, Changling Hydraulics was listed on the Shanghai Stock Exchange, and as of August 27, the stock price reached 53.78 yuan / share, a cumulative increase of 36.50%.

It is understood that Changling Hydraulic raised 895 million yuan for the construction of hydraulic slewing joint expansion project, tensioning device relocation and expansion project, intelligent manufacturing reconstruction project, R & D trial production center upgrade construction project. As of June 30 this year, the actual investment amount of the company's self-raised funds pre-invested in the investment project was 189 million yuan, accounting for 19.48% of the total investment.

The semi-annual report also revealed that during the reporting period, the projects of Changling Hydraulics were promoted in an orderly manner, and the expansion project of hydraulic slewing joints and the relocation and expansion project of tensioning devices were carried out in an orderly manner; the completion and acceptance procedures related to the construction of the Changling Taixing Huangqiao plant were already being handled, and it is expected to obtain real estate property rights certificates within the year; the No. 1 plant on Changrun Road also obtained real estate property rights certificates in mid-August this year. At the same time, the electroplating production line has also been put into production, as an extension of the existing product process, the independent realization of the process, can effectively improve the quality and efficiency of the company's products in the process of processing and production, while reducing the corresponding production costs.

R & D investment of 21.11 million yuan A number of new products are under development

As a high-tech enterprise in Jiangsu Province, after years of R&D investment, Changling Hydraulics has broken through a number of core key technologies, has 8 high-tech products and more than 90 patents, successfully developed products with independent intellectual property rights such as hydraulic central slewing device for multi-channel heavy machinery, breaking the monopoly of foreign technology, and is widely used in shield machines, offshore work platforms, port operating vehicles, aerial work platforms, large tonnage crawler cranes, etc.

Changling Hydraulics has always taken technological innovation as its core competitiveness, continuously increased its own scientific research team construction and R & D equipment investment, has formed a multi-level technological innovation operation mode led by the technology research and development department, with the technical backbone as the link and the technical group of each section as the fulcrum, successfully developed high scientific and technological content, strong market competitiveness, good economic benefits, established an industry-leading technical advantage, and broke the long-term monopoly of foreign brands in the field of central slewing joints.

Changling Hydraulics is also the presiding drafting unit of the national standard of "GB/T 25629-2010 Hydraulic Excavator Central Slewing Joint", and its "relocation and expansion of 80,000 sets of hydraulic central rotary body for construction machinery, hydraulic track tightening device and other parts and components project" won the 2011 key industry revitalization and technological transformation of the central special project.

According to the 2021 semi-annual report, during the reporting period, Changling Hydraulics invested 21.11 million yuan in R&D, with a total of 6 new patents, including 5 invention patents and 1 utility model patent, and successfully developed a number of products with independent intellectual property rights.

In addition, after years of technical precipitation and experience accumulation, Changling Hydraulics directly participates in the product research and development and technical improvement of the main engine factory, designs the mold according to customer needs and formulates the corresponding production process to ensure the launch of customer satisfaction products at the specified time node. During the reporting period, the company signed a technical cooperation agreement with the technical department of famous host manufacturers at home and abroad to grasp the changes in market demand in a timely manner and enrich the serialization and diversification of products.

As a key parts and components enterprise in the hydraulic industry, Changling Hydraulics has been deeply cultivating the hydraulic field for many years, facing the current situation of the domestic hydraulic manufacturing industry being large but not strong, on the one hand, the company continuously enhances the competitiveness at home and abroad by doing a good job, making it bigger and stronger existing products; on the other hand, the company builds a new product research and development team through the active introduction of high-quality talents, accelerates the research and development progress of a variety of new products, and continuously deepens the moat of the enterprise in terms of technology accumulation, product types, scale volume and customer resources. Accelerate the replacement process of domestic hydraulic parts.

If talents are prosperous, enterprises are prosperous, and talents are strong, enterprises are strong. Changling Hydraulics has always adhered to the "people-oriented" talent introduction concept, multi-level and all-round introduction of R & D, production, sales, management personnel. The company has cultivated a group of experienced, high loyalty to the enterprise, rigorous style, strong innovation ability, excellent industry technology team, and established the core development ideas of enterprises that open up the market with talent and technological innovation.

In today's globalized trade, in the face of increasingly fierce competition in the hydraulic components and parts market, the construction of first-class R&D, production and sales teams is indispensable. Through internal exploration and high salary introduction of talent team, Changling Hydraulic has created its own professional and technical production team, innovative R & D team, market development awareness of the sales team and a management team that is well versed in the operation of the industry.

Industry prosperity elongation Product quality is the credibility of the brand

Since 2019, especially in 2020, in response to the impact of the epidemic on the macroeconomy, the Government Work Report proposes to focus on supporting the construction of "two new and one heavy", that is, new infrastructure involving 5G, charging piles and other fields, new urbanization involving the transformation of old residential areas, and three major areas involving transportation, water conservancy and other major projects.

In 2020, the global hydraulic parts market size reached 258 billion yuan, China's hydraulic market size of 77.9 billion yuan, China is a big country in hydraulic manufacturing, but the development of the hydraulic industry can not adapt to the host equipment support, which has also become one of the bottlenecks restricting China's equipment manufacturing industry.

With leading manufacturing technology and excellent product quality, Changling Hydraulics has formed a certain reputation and influence in the hydraulic machinery parts industry. All along, the company attaches great importance to product quality, and actively introduces a number of sets of advanced processing equipment, such as large CNC vertical vehicles, full CNC lathes, vertical machining centers (large rotary tooling), vertical honing machines and other equipment, with semi-automated assembly lines and unitized processing lines from assembly - testing - painting; with perfect testing and testing equipment, such as air tightness test, durability test, type test equipment, etc., to ensure the stability and reliability of product quality.

It is understood that the long-term hydraulic products have reached the standard requirements of 3,000 hours of foreign installed assessment in terms of installed capacity assessment time. Stable product quality, excellent performance, competitive price, relatively low cost of use, meticulous and thoughtful after-sales service constitute the company's products have a strong cost-effective advantage, compared with foreign advanced products have a comparative advantage.

Customers have extremely high requirements for product stability and reliability, and brand credibility is an important basis for downstream manufacturers to choose long-age hydraulic products. With its high-quality products, thoughtful service and strong technical support capabilities, the company is favored by many downstream well-known manufacturers, and has been rated as an excellent supplier by many well-known enterprises at home and abroad such as Sany Heavy Machinery, Liugong Machinery, Hyundai Heavy Industries for many years, and has won the Caterpillar SQEP Certification Platinum Award for many times.

At the same time, Changling Hydraulics took the listing as an opportunity, with the help of the power of the capital market, expanded the company's current two main products central slewing joint and tensioning device production capacity, in the case of ensuring the supply of existing customers, and actively develop new customers, in the field of aerial work vehicles, has completed the certification of a number of domestic and foreign OEMs, and began to supply small batches. Text/Luo Chengqiang

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