The main content of investor relations activities
First, please introduce the market size of the cutting tool industry
The domestic cutting tool market size of about 40 billion, of which about 53% for carbide tools. One of the large customers of the tool consumption scale in about 10 billion, to the aerospace industry, for example, its engine model is not the same, the parts will be very different, need a lot of non-standard tools.
Second, please introduce the main cutting tool materials
Cutting tool materials mainly include tool steel, cemented carbide, ceramics and super-hard materials, etc., of which cemented carbide and high-speed steel compared with high hardness, wear resistance and red hardness, and ceramics and super-hard materials compared to the cemented carbide has a high toughness. Because of its good comprehensive performance, Cemented Carbide is widely used in the machining of steel (P), stainless steel (M), cast iron (K), non-ferrous metals (N), heat-resistant steel (S) and hardened steel (H) materials. According to the statistics of the Fourth Cutting Tool User Survey Data Analysis Report, as of the end of 2018, China's machining industry used carbide cutting tools accounting for 53%.
Third, please introduce the performance index of the tool
Carbide CNC tools usually contain two dimensions of material properties and cutting performance, of which the material properties include hardness and impact toughness, in general, the higher the hardness, the worse the impact toughness, and usually have to balance the hardness and toughness of the tool according to the specific application areas. Cutting performance includes durability, machining efficiency and machining accuracy. The company's core products in the machining accuracy, machining efficiency and service life and other cutting performance has been in the domestic advanced level, into the Europe and the United States and Japan and South Korea cutting tool companies have long occupied the domestic high-end market, especially milling inserts have formed a significant competitive advantage.
Fourth, please introduce the competitive landscape of the cutting tool industry
At present, the international cutting tool industry competition is roughly divided into three camps. The first camp is represented by Sandvik European and American cutting tool companies, European and American cutting tool companies are located in the customer to provide complete cutting tool solutions, through strong investment in research and development, personnel training and quality management system to promote its product system continues to innovate, and technologically at a sustained level of leadership in the field of high-end customized cutting tools has always occupied a dominant position in the market oligopolistic competition. The second camp is represented by Mitsubishi Materials Japan and South Korea cutting tool companies, Japan and South Korea cutting tool companies are located in providing customers with high versatility, stability and cost-effective products, non-customized cutting tools in the field of high-end manufacturing industry has won the favor of many manufacturers. The third camp is represented by Zhuzhou diamond domestic cutting tool enterprises, a large number of competitive strength gap, mainly through the differentiated product strategy and price advantage, won more low-end market share.
At present, the main gap between domestic cutting tools and imported high-end cutting tools is reflected in the stability of the product, consistency and the ability to provide overall cutting solutions, so the future competition among cutting tool companies is mainly embodied in the technical competition.
Fifth, please introduce the company and domestic competitors in the same industry differences
Wold to super-hard cutting tools, Hengfeng tools to high-speed steel cutting tools, Ouko billion including carbide products and carbide CNC inserts, the company to carbide CNC inserts.
Six, please introduce the company's development history
2007-2011, the company seized the opportunity of rapid development of automotive, construction machinery, energy equipment and rail transportation and other industries, targeting Taiyuan Heavy Industry, Dongfang Electric and CITIC Heavy Industry and other end customers cutting application needs, to provide customers with non-standard customized cemented carbide cutting tools, mainly in the mode of direct sales.
2012-2016, due to the complexity of the end customer's tooling needs and long payback period, the company adjusted the direction of business development in a timely manner, and gradually moved from "providing large customers with non-standard customized products" to "meet the needs of many small and medium-sized machining enterprises in metal cutting*** standard products", and then to "meet the needs of many small and medium-sized machining enterprises in metal cutting". The company gradually adjusted its business development direction from "providing non-standard customized products for large customers" to "standard products to meet the metal cutting needs of many small and medium-sized machining enterprises". In view of the standard cutting tool market has a large amount of use, species concentration, strong generality, fierce competition in the market and other characteristics, the company adopts the "focus on the advantages of a single product breakthrough" R & D strategy, the development of mold milling cutters and slotting inserts and other cost-effective advantage of the product. At the same time, it began to transform into a distribution model.
So far in 2017, the company's core products in the machining accuracy, machining efficiency and service life and other cutting performance has been in the domestic advanced level, into the Europe and the United States and Japan and South Korea cutting tool companies have long occupied the domestic high-end market. The company has successively launched "Stubborn Stone" and "Huddlestone" series products with unique base material, groove structure and coating process, which have been highly recognized by the market. At the same time, the launch of the store model to further improve the sales network.
Since January 2020, a new coronavirus outbreak has occurred at home and abroad, and the importation of some high-end CNC inserts from Europe, America, Japan and South Korea has been impeded, affecting the timeliness and stability of their supply to end customers. The company as a representative of a number of excellent domestic cutting tool companies with product performance and service advantages, to further accelerate the replacement of high-end imported cutting tool products.
Seven, please introduce the company from the direct sales model to the reasons for the transformation of the distribution model
Due to the complexity of the end customer's demand for knives and long payback cycle, the company adjusted the direction of business development in a timely manner, and gradually from the "non-standard customized products for large customers" to "meet the needs of many small and medium-sized machining enterprises metal cutting tools," the company said. The company adjusted its business development direction in time, gradually transforming from "providing non-standard customized products for large customers" to "standard products to meet the metal cutting needs of many small and medium-sized machining enterprises". In view of the standard tooling products market has a large amount of use, variety concentration, strong generality, market competition, etc., the company adopts the "focus on the advantages of a single product breakthrough" R & D strategy, the development of mold milling cutters and slotting inserts and other cost-effective advantage of the product.
In order to meet the country's widely distributed, different sizes of small and medium-sized machining enterprises with knife needs, the company sells its products directly to the national large wholesale tool market and large industrial clusters around the region's dealers, and gradually get rid of the dependence on large customers, initially covering the domestic distribution of the three major domestic tool distribution markets in South China, East China and North China, and regional industrial clusters of the sales network.
Eight, please introduce the company's dealer store mode
Dealer store mode is a distribution model, refers to the dealer to open a store to promote the company's products distribution. Dealer store mode is the extension and broadening of the company's existing distribution channels, so that the company's products closer to the market, close to the terminal, effectively enhance market influence, and through the store to collect and feedback on end-user demand for knives
Nine, please tell us about the advantages of the company's products
The company's mold milling cutter in the domestic high-speed milling processing of molds in the field of a high degree of visibility and influence. In 2017, the company's mold milling inserts won the "Ringier Technology Innovation Award", and in 2019, the company's Frontier series of cemented carbide CNC inserts won the "Golden Front Award" (the first cutting tool innovation product award).
X. Please tell us about the pricing factors of the company's products
The company determines the final selling price on the basis of the production cost, combined with the product performance, competitors' pricing, market conditions, customers' purchasing scale, and competitive strategy.
XI, please introduce the main technologies involved in the production of cutting tools and the company's technological development in recent years
Carbide CNC inserts are technology-intensive industry, its technology is mainly concentrated in the four major areas of base material, groove structure, precision molding and surface coating, involving physics, chemistry, materials science and other disciplines. To the field of matrix materials, for example, with the new materials used in the workpiece continues to emerge, the performance of cutting tools used in the processing of the workpiece will also put forward different needs, this differentiated demand for the performance of the matrix material will produce different needs. The nature of the raw material particle size distribution, degree of carbonization, crystalline structure, agglomeration, surface defects, etc.), composition ratio (hard phase content, bonding phase content, the proportion of the third phase, strengthened modification of the group element additions, etc.), organizational structure (gradient structure, sub-microscopic structure, bicrystalline structure, etc.) as well as the subsequent process will have varying degrees of impact on the performance of base materials, so the technical level of the company's R & D capabilities put forward a higher demand. The company's technical level and R&D capability have put forward higher requirements.
The company's current core technology level is at the domestic advanced level, in recent years in the complex precision molding, metal ceramic materials and nano-coating materials research has achieved certain development.
XII, please introduce the production mode of cutting tools
The production of cutting tools mainly includes batching, ball milling, spray drying, press molding, sintering, grinding and deep processing, coating and other processes. The standard production cycle is generally about 5-7 weeks, so the company sets up a moderate safety stock for products with stable market demand in order to respond quickly to customer needs.
13, please introduce the company against raw material price fluctuations to take measures
The company against raw material price fluctuations to take the following major measures: (1) with the main raw material suppliers to consolidate, expand and establish a closer long-term cooperative relationship, to sign a framework agreement, prepayment to lock the price and quantity of the way to control the cost of raw materials, to get the more favorable procurement prices in the market, to avoid the upstream raw materials, and to avoid the price of raw materials, to avoid the price of raw materials, to avoid the price of raw materials. Preferential procurement prices, to avoid the negative impact of rising upstream raw materials to the production and operation; (2) constantly optimize the product structure, relying on technological advantages to win, compared with relying on low-cost competition strategy to capture the market, the company's products are less susceptible to fluctuations in the price of raw materials, the company's production and operation of the company's risk is also lower. (3) Increase investment in production equipment, introduce advanced machinery and equipment at home and abroad, and implement high-quality control standards so as to reduce raw material consumption, improve the output rate and reduce the scrap rate, and to achieve the purpose of improving the gross profit margin of single piece of finished products. (4) The company's purchasing staff through the public information query raw material prices, price comparison between a number of suppliers to request quotations, timely tracking of raw material price trends to reduce the risk of fluctuations in raw material prices.
Fourteen, please introduce the company's R & D model and R & D team
The company set up by the deputy general manager in charge of R & D, chief engineer and chief processor planning and guidance, the design department, process department and material department *** with the implementation of the complete R & D model, to determine the basic research and new product development of two important R & D direction. The company's R&D process includes four stages: demonstration, design, development and testing, and adopts the R&D strategy of "focusing on strengths and making breakthroughs in a single product". After the demonstration of the basic research and new product development projects, each department under the company's R&D system will collaborate with the company in the development of new products, and the internal and external elements of the company's R&D and production will be mobilized to continuously promote the technological progress.
At the same time, the company has created a reasonable gradient of old, middle-aged and young, a complete range of disciplines, solid professional skills of the R & D talent team, covering the four core areas of the manufacture of cemented carbide CNC inserts, in particular, the chief engineer Gao Ronggen laid the company's leading position in the field of cemented carbide CNC inserts matrix materials.
Fifteen, please introduce the company's future development strategy
In the future, the company will further consolidate and give full play to the company's strengths in technological innovation, product development, increase R & D investment and talent team building, technology to promote the market as the guide, and constantly upgrade and iterate the product and develop new series. On the basis of consolidating the dominant position of cemented carbide CNC inserts market, the company will prioritize the development of basic material technology research, and enter into the field of metal ceramics, ceramics, superhard materials and other new materials; at the same time, through the development of new product projects, expanding into the field of tooling systems, precision and complex combinations of cutting tools, further enriching the company's product line. By continuously improving the comprehensive metal cutting service capability to large and medium-sized enterprises, the company will build the company from a mere provider of cutting products into a leading overall cutting solution provider in China.
Sixteen, please introduce the company's future development plan
1, market expansion plan
Gradual implementation of product development plans for different markets, industries and customers: for the urgent transformation of the domestic cutting tool trading company, accelerate the layout of the domestic distribution market, the establishment of a sound "HADSTONE" series of products first-class specialty stores. "series of products of the first level of specialty stores and sales network layout, while actively exploring overseas markets, improve the layout of overseas distribution market dealers; in the vicinity of large industrial clusters, there are plans to develop, layout "stubborn stone" series of products dealers, so that the company's products and technology can be further close to the mechanical processing End-user needs, and the depth of the integration of the industrial clusters; strive to reach a strategic cooperation with some of the key industries in the domestic key customers, to create a comprehensive "Sinovel" brand, the introduction of customized overall cutting solutions and application services.
2, technology enhancement program
The company has always adhered to independent innovation, through increasing investment in research and development, to enhance the level of research and development; and at the same time to strengthen close cooperation with scientific research institutes, the establishment of a joint platform for cooperation between schools and enterprises, to improve the company's basic research level. On the one hand, the company will continue to increase the base of new materials, new coating technology, basic research work, on the other hand, will continue to increase the development of new products, enhance the overall performance of the product, to provide customers with practical, reliable and cost-effective cutting tools.
3, talent development program
The company will strengthen the cultivation and introduction of talented people, the full implementation of the strategy of strengthening enterprises with talent, and strive to create a new employment mechanism and policy environment. First, accelerate the training of talents, pay attention to continuing education and training, improve talent incentives, training mechanisms, and cultivate a number of technical backbone and management personnel to adapt to industrial upgrading; second, we will strive to create a favorable environment for the growth of talent, respect for talent, and fully mobilize the enthusiasm and creativity of talent to make the best use of talent; third, we will strengthen human resource management, enhance the construction of high-level talent, and establish an effective Third, strengthen human resources management, strengthen the construction of high-level talents, and establish an effective human resources incentive mechanism.
4, financing plan
Precision high-efficiency cutting tool industry is a capital-intensive industry, sufficient funds is to reduce enterprise costs, improve enterprise competitiveness and risk resistance, to maintain product and technology leadership is an important guarantee. In the future, the company will launch the refinancing plan in due course according to the actual needs of business development, and expand financing channels to maintain a reasonable balance sheet structure under the premise of fully guaranteeing the interests of shareholders, especially the small and medium-sized shareholders.
Attachment: Activity Information Sheet
(This draft was completed by the Securities Times e-company writing robot "Racer Little e".)