Hanbell(002158) 东兴证券·2024-07-11 03:30Investment Rating - Strong Buy/Initiation: The report gives a "Strong Buy" rating for Hanbell Precise Machinery (002158 SZ) with a target PE of 9x for 2024 [7] Core Views - Vacuum pump revenue share increased from 5 07% in 2016 to 42 63% in 2023, driving brand recognition and differentiation [1] - Gross margin rose from 32 63% in 2018 to 40 32% in 2023, with net margin following suit [1] - ROE grew from 6 80% in 2017 to 25 07% in 2023, supported by improved asset turnover [1] - Heat pump market growth driven by 340 billion RMB central budget for air pollution control in 2024 [2] - Compressor business revenue growth correlates with air-source heat pump sales growth [2] Financial Projections - Revenue expected to grow from 3 85 billion RMB in 2023 to 5 81 billion RMB in 2026, with 14 9% YoY growth in 2026 [5] - Net profit projected to increase from 865 million RMB in 2023 to 1 33 billion RMB in 2026 [5] - EPS forecasted to rise from 1 62 RMB in 2023 to 2 48 RMB in 2026 [5] - PE ratio expected to decline from 9 98x in 2023 to 6 51x in 2026 [5] Business Overview - Core products include commercial central air conditioning compressors, refrigeration compressors, heat pump compressors, air compressors, and vacuum pumps [3] - Recognized as a national key new product enterprise and among China's top 100 manufacturing companies [3] - Market cap of 8 32 billion RMB with 53 47 million shares outstanding [3] Industry Dynamics - 35 million units of commercial refrigeration equipment expected to be replaced under new energy efficiency standards [6] - Domestic screw compressor market share only 20 22% in 2020, compared to 80% in developed countries [145] - Dry oil-free screw compressor penetration rate below 1% in China vs 35% in developed markets [148] - Heat pump sales expected to rebound with 340 billion RMB central budget for air pollution control [151] Competitive Advantages - Strong R&D capabilities with proprietary 5 6 asymmetric rotor tooth profile [69] - Complete product matrix covering central air conditioning, refrigeration, heat pumps, air compressors, and vacuum pumps [60] - Efficient capital allocation with long-term equity investments increasing from 0 19% in 2016 to 2 91% in 2023 [57] - Consistent dividend payout with cumulative dividend ratio of 43 23% from 2007 to 2024 [57]