NEWAY(603699) 国泰君安·2024-08-24 14:20Investment Rating - The report maintains an "Overweight" rating for the company, with a target price of 21.96 CNY, up from the previous target of 20.98 CNY [4] Core Views - The company has been deeply involved in the valve industry for 20 years, with a broad business layout and diversified downstream sectors, making it resilient to cyclical fluctuations [1] - The company is expected to achieve rapid growth due to the recovery of traditional downstream sectors and the rapid expansion of new businesses such as new energy and nuclear power [1] - The company's performance in H1 2024 met expectations, with revenue reaching 2.838 billion CNY (+17.14% YoY) and net profit attributable to shareholders reaching 488 million CNY (+45.04% YoY) [12] - The company's order structure has been optimized, with gross margin reaching 35.48% (+5.78 ppts YoY) and net margin reaching 17.41% (+3.33 ppts YoY) in H1 2024 [12] Financial Summary - Revenue is expected to grow from 4.059 billion CNY in 2022 to 9.051 billion CNY in 2026, with a CAGR of 22.2% [2] - Net profit attributable to shareholders is projected to increase from 466 million CNY in 2022 to 1.297 billion CNY in 2026, with a CAGR of 29.3% [2] - ROE is expected to rise from 14.3% in 2022 to 24.6% in 2026, indicating improving profitability [2] - The company's EPS is forecasted to grow from 0.61 CNY in 2022 to 1.71 CNY in 2026 [2] Business Highlights - The company has made breakthroughs in multiple areas, including the delivery of 106 sets of dual-link switching valves, the successful acceptance of a 28-inch subsea ball valve, and the acquisition of international FPSO projects [12] - The company has also secured contracts for energy storage and gas storage wellhead projects in the Middle East and Europe, as well as high-end nuclear power product procurement [12] - Traditional downstream sectors (chemical, refining, oil extraction) are experiencing increased demand, while new businesses (LNG, offshore engineering, nuclear power) are growing rapidly [12] - The global renewable energy share in electricity generation reached 30% in 2023, and is expected to increase to 35% by 2025, driving higher demand for industrial valves [12] Valuation - The company is valued at 18x 2024E PE, higher than the industry average of 17.24x, reflecting its strong competitive advantages and high growth potential [13] - Comparable companies include Jiangsu Shentong (002438 SZ) and CNNC SUFA Technology Industry (000777 SZ), with average 2024E PE of 17.24x [14]