The Zhitong Finance App learned that Guojin Securities released a research report saying that at present, the technical gap between domestic 5-axis tool grinders and imported grinders is small. The bank believes that domestic replacement can be achieved in the context of sufficient demand catalytic (for example, the background of tool grinders is the high growth of domestic tool brands in recent years). If downstream demand explodes, it is expected to catalyze the rise of domestic production. At the same time, there are major import restrictions on high-end grinders. For example, exports of high-end grinders from Japan are subject to strict scrutiny by the Japanese government, and even if purchased, there are restrictions on the scope of use, migration restrictions, etc., and it is expected that domestic replacement will be accelerated with the support of autonomous and controllable policies.

Guojin Securities's views are as follows:

Grinders are created for finishing, and technical barriers are high:

Grinders are designed to meet the needs of finishing and hard surface processing, mainly external grinding machines, internal grinding machines, and surface grinders. Under normal processing conditions, the accuracy level can reach IT5 to IT6 (grinding/polishing can reach higher), while the accuracy level of milling (machining centers are generally milling) between IT7 and IT14 according to rough milling and fine milling, and the surface roughness also varies greatly. To achieve high-precision and high-speed processing, grinders have high technical barriers, and have high requirements for structural parts (such as grinding machine screws that can reach the highest accuracy level C0), functional parts (high accuracy and electrical control capability), and assembly.

There is plenty of room to replace imports of high-end domestic grinders, and the explosion in downstream demand is expected to catalyze the rise of domestic production:

Companies with leading grinding machine technology in countries such as Japan, the US, and Germany have developed and matured, seizing the market with different positions of “big and complete” (such as the nine major grinding machine brands under the PSS Group) and “small but beautiful” (for example, Mitsui Seiki thread grinding machine market share leader). However, judging from technology and patents, domestic companies are catching up. According to data from the General Administration of Customs, China's grinder imports in '22 were US$835 million, and there is plenty of room for import substitution. At the same time, the average import price is much higher than the average export price. For example, the average import price of CNC surface grinders was US$183,300 in 22 and the average export price was US$44,400. Currently, the technical gap between domestic 5-axis tool grinders and imported grinders is small. The bank believes that domestic replacement can be achieved in the context of sufficient demand catalysis (for example, the background of tool grinders is the high growth of domestic tool brands in recent years), and if downstream demand explodes, it is expected to catalyze the rise of domestic production. At the same time, there are major import restrictions on high-end grinders. For example, exports of high-end grinders from Japan are subject to strict scrutiny by the Japanese government, and even if purchased, there are restrictions on the scope of use, migration restrictions, etc., and it is expected that domestic replacement will be accelerated with the support of autonomous and controllable policies.

Screw: The grinding machine is the core equipment for grinding screws, and it is imperative to reduce costs through domestic equipment.

In the screw processing process, there are three technical routes for rough processing: grinding/hard car/cyclone milling. Finishing mainly uses grinding, and grinding hours account for about 39% of the total working hours. Judging from the Qinchuan machine tool case, the investment amount of grinding machines accounts for about 48% of the investment in screw expansion equipment. The difficulties in screw processing mainly focus on raceway processing. Nuts and screw shafts require internal thread and external thread processing respectively. According to the bank's estimates, according to the calculation of different processing hours, 1 million humanoid robots correspond to a market space of 2.2 to 4.4 billion yuan for grinding machines. Currently, the lead company's screw grinders mainly use equipment imported from Japan and Germany, and the unit price of a high-precision bed guide rail grinder purchased by Qinchuan Machine Tools is as high as 28 million yuan. The bank believes that at present, on the one hand, domestic thread grinders already have some technical accumulation. In 2014, the Shanghai machine tool factory SK7420 was able to achieve P1 ball screw sub-processing, which shows that domestic companies have the technical strength to manufacture high-end thread grinders; on the other hand, humanoid robot screws have strong demand for cost reduction and high requirements for customized development & automation upgrades. In this regard, domestic companies close to end customers are expected to seize the opportunity. In the context of high growth in the humanoid robot industry, it is imperative to achieve cost reduction through the use of domestic equipment.

Titanium alloy: Apple uses titanium alloy materials in mobile phones and watches, driving demand for grinding and polishing equipment.

Grinders in the consumer electronics industry are widely used for polishing glass panels, cases, and middle frames of mobile phones and computers. Currently, Apple phones and watches use titanium alloy materials, and Android manufacturers are expected to follow suit. Titanium alloy materials are more difficult to process, and problems such as high grinding temperature and grinding wheel adhesion will occur. Existing equipment needs to be upgraded or updated, which is expected to drive demand for related grinding and polishing equipment.

Silicon carbide: High growth in the industry is driving demand for grinding and polishing equipment, and there are many potential marginal catalysts after domestic equipment development and implementation.

In the silicon wafer preparation process, roller grinding (cylindrical grinding), chamfering (end surface grinding, etc.), grinding (plane grinding), and polishing (similar to plane grinding) all require the use of a grinding machine, which has good application prospects. According to Wolfspeed data, the automotive silicon carbide penetration rate is expected to increase significantly by more than 50% in 26 years. The automotive silicon carbide market space will reach 4.986 billion US dollars in '27, and the CAGR is 39% from '22 to '27, which is expected to drive demand for related grinding and polishing equipment. However, at present, domestic grinding machine equipment suppliers have basically developed related products. Currently, they are gradually transitioning from proofing to batch shipping, and there are many potential marginal catalysts in the future.

Investment advice: Grinders are designed for finishing, and there is more room for domestic alternatives due to high barriers on the racetrack. Currently, domestic grinders have a certain amount of technology accumulation. Domestic substitution is expected to accelerate in the context of multi-point catalysis of downstream demand for screws, titanium alloys, and silicon carbide. It is recommended to focus on Huachen Equipment (300809.SZ) (screw grinder), Yuhuan CNC (002903.SZ) (titanium alloy grinder, silicon carbide grinder), Rifa Precision (002520.SZ) (screw grinder), Qinchuan Machine Tool (000837.SZ) (screw grinder), Huazhong CNC (30016SZ) CNC system for grinding machines).

Risk warning: Downstream demand falls short of expectations, and new product verification falls short of expectations.