NEWAY(SH:603699) ZHESHANG SECURITIES·2024-09-30 00:23Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [3][5][7]. Core Viewpoints - The company is positioned as a leading player in the domestic industrial valve market, benefiting from globalization, high-end product demand, and multiple downstream sectors [1][2]. - The industrial valve industry has a global market size projected to reach $134.7 billion by 2032, with a CAGR of 7.2% from 2023 [1][2]. - The company has shown strong financial growth, with a 5-year CAGR of 15% in revenue and 21% in net profit, alongside a geometric ROE of 17% [1][2][25]. Financial Summary - The company’s revenue for 2023 was 5.544 billion yuan, with a year-on-year growth of 36.6% [20]. - The net profit for 2023 was 722 million yuan, reflecting a 54.9% increase year-on-year [20]. - Forecasted net profits for 2024, 2025, and 2026 are 931 million yuan, 1.069 billion yuan, and 1.239 billion yuan, respectively, with growth rates of 29%, 15%, and 16% [3][4][7]. Market and Industry Analysis - The global industrial valve market reached $72.2 billion in 2023, with a 5.8% year-on-year growth [1][2]. - The domestic market size for industrial valves was $10.2 billion in 2023, growing by 5.6% [1][2]. - The competitive landscape is fragmented, with major players in high-end valves located in North America, Japan, and Germany, while many domestic manufacturers focus on low-end products [1][2]. Company Advantages - The company has a global presence with nearly 100 distributors across over 80 countries, enhancing its service capabilities [2]. - It has established a strong supply chain with multiple manufacturing facilities, ensuring innovation in valve technology and materials [2][21]. - The company has received various international certifications, allowing it to provide comprehensive solutions for mid to high-end valves [2][21]. Growth Potential - The company’s global market share is approximately 1%, indicating significant growth potential compared to leading competitors [2]. - The expected growth in downstream sectors such as oil and gas, marine engineering, and renewable energy is anticipated to drive demand for industrial valves [1][9][10].