Strongly recommend [Huarui Precision]: Leading domestic cutting tool maker, import substitution and overseas expansion resonate together

English summary

Overseas cutting tool prices are rising intensively, starting a new round of price hikes. Kyocera, Sumitomo, and YAMAWA will adjust prices on August 1. Sandvik and Walter will adjust prices on September 1. The price center of overseas cutting tools moves upward. The cost-performance advantage of domestic high-end cutting tools is accelerating its return. Q2 disturbances accelerate clearing, and Q3 recovery foundation is established. In Q2, Japanese and Korean cutting tool prices were once lower than domestic ones, putting temporary pressure on domestic high-end cutting tool demand and performance. As overseas price hikes take effect and low-priced imported inventory is depleted, domestic demand and market share are expected to recover. Domestic cutting tools: import substitution + overseas expansion, dual logic accelerating. Overseas APT prices are approximately 2.9–3.2 times domestic levels, significantly higher. Cost pressure on overseas cutting tool brands continues to increase, gradually passing through to product prices. Domestically, import substitution is entering a golden period. Externally, the cost-performance of Chinese cutting tools further improves, and overseas expansion faces an important window. We predict that Q3 will see a golden growth period for domestic cutting tools! Key recommendation: Huarui Precision: Q3 main business is expected to recover sequentially, and the 27-year tungsten industry chain integration will enter a payoff period.…