GUOTONG PP(SH:600444) Guoyuan Securities·2024-09-29 00:05Investment Rating - The report initiates coverage with a "Buy" rating for the company [20]. Core Views - The company, backed by Hefei General Machinery Research Institute, is a leading enterprise in fluid machinery technology, with a broad layout that opens up significant growth potential [2][10]. - The main revenue sources include environmental engineering and system integration, refrigeration testing equipment, and non-standard fluid machinery products and services, which accounted for 39.3%, 20.1%, and 21.3% of total revenue in 2023, respectively [2][10]. - The company is expected to enhance its profitability in the short term and maintain a positive long-term growth trend, driven by the divestment of its plastic pipe business and entry into emerging sectors [20]. Summary by Sections Company Overview - The company operates in two main areas: fluid machinery and pipe materials, with a focus on environmental engineering as its core business [10]. - The fluid machinery segment includes products such as refrigeration testing devices and wastewater treatment equipment, while the pipe materials segment is gradually exiting the plastic pipe business [2][10]. Revenue and Profitability - In 2023, the company's revenue reached 7.55 billion yuan, with a compound annual growth rate (CAGR) of 2.52% from 2020 to 2023 [11]. - The gross margins for refrigeration testing equipment and non-standard fluid machinery products were 24.6% and 21.3%, respectively, indicating strong profitability in these areas [2][10]. Financial Forecast - Revenue projections for 2024, 2025, and 2026 are 7.57 billion yuan, 8.48 billion yuan, and 9.55 billion yuan, representing year-on-year growth rates of 0.21%, 12.08%, and 12.58% [20]. - The expected net profits for the same years are 440 million yuan, 560 million yuan, and 630 million yuan, with corresponding growth rates of 10.33%, 27.56%, and 11.15% [20]. Market Position and Opportunities - The company is positioned to capture new business opportunities in the cold chain and large-scale research bases due to its advanced refrigeration technology and environmental simulation capabilities [2][10]. - It has developed a comprehensive process and equipment for lithium extraction, production, and recycling, which aligns with the growing lithium battery recycling market [17].