NEWAY(SH:603699) Guotai Junan Securities·2024-07-10 23:01Investment Rating - The investment rating for the company is "Buy" with a target price of 20.98, maintaining the previous rating of "Buy" [2][3]. Core Views - The company's performance exceeded expectations, with strong orders and sales. The forecast for EPS for 2024-2026 has been raised to 1.21, 1.40, and 1.67 yuan respectively, up from the previous estimates of 1.14, 1.35, and 1.60 yuan. The target price remains at 20.98 yuan, and the recommendation is to "Buy" [3]. Summary by Sections Financial Performance - The company anticipates a net profit of approximately 4.37-5.72 billion yuan for H1 2024, representing a year-on-year growth of 30.0% to 70.0%, with a midpoint estimate of 5.05 billion yuan, a 50% increase year-on-year. For Q2 2024, the expected net profit is 2.41-3.75 billion yuan, with a year-on-year growth of 1.0% to 57.5% [3]. - The expected net profit after deducting non-recurring items for H1 2024 is approximately 4.30-5.65 billion yuan, indicating a year-on-year growth of 22% to 61% [3]. Order and Market Expansion - The company is actively expanding its market presence, optimizing product structure and design, improving product quality, and enhancing operational efficiency, which contributes to the high growth in profits. The high-margin businesses in offshore shipbuilding, oil and gas development, and LNG are expected to increase their share of orders [3]. - The order structure is continuously improving, with sufficient orders on hand and new orders being prepared for 2025. The company is seeing balanced order intake across various downstream sectors, which is a key driver for profit growth [3]. Industry Outlook - The traditional downstream sectors are benefiting from stable global power generation and increasing energy demand, which is driving high demand for industrial valves. The LNG and hydrogen sectors are also seeing increased demand due to geopolitical factors and energy transitions [3]. - The domestic LNG and FPSO ship orders are increasing, and the industry is expected to accelerate domestic substitution. The nuclear power sector is projected to disclose 6-8 new nuclear units annually, with each unit requiring valves valued at approximately 500 million yuan [3]. Financial Projections - The company’s revenue is projected to grow from 5,544 million yuan in 2023 to 6,930 million yuan in 2024, reflecting a growth rate of 25.0%. Net profit is expected to rise from 722 million yuan in 2023 to 923 million yuan in 2024, a growth of 27.9% [5]. - The projected EPS for 2024 is 1.21 yuan, with a net asset return rate of 22.1% [5]. Market Data - The stock has a market capitalization of 12,318 million yuan, with a price-to-earnings ratio of 17.07 based on the current price [25].