NEWAY(SH:603699) Southwest Securities·2024-10-23 10:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of 27.80 CNY over the next six months, based on a current price of 21.56 CNY [1]. Core Insights - The company is positioned as a leading player in the industrial valve market, benefiting from a global market size of 73.2 billion USD, with significant growth potential due to its comprehensive product offerings and global expansion strategy [1][25]. - The company has established a strong presence in both domestic and international markets, with revenue growth of 48.2% year-on-year in overseas markets and 27.4% in domestic markets for 2023 [1]. - The company is expanding into high-demand sectors such as oil and gas, nuclear power, and water treatment, which are expected to drive future revenue growth [1][25]. Summary by Sections 1. Company Overview - The company has evolved into a leading manufacturer of industrial valves, providing a full range of valve solutions across various industries including oil and gas, chemical, and power generation [11][13]. - The company has a well-established global footprint with subsidiaries in multiple countries, enhancing its competitive edge [1][11]. 2. Market Potential - The global valve market is projected to grow from 73.2 billion USD in 2021 to 92.3 billion USD by 2026, with a compound annual growth rate (CAGR) of 4.8% [1][25]. - The competitive landscape is highly fragmented, with the top 10 companies holding only a 13% market share, indicating significant opportunities for growth [1][25]. 3. Financial Performance - The company reported a revenue of 55.4 billion CNY in 2023, with a CAGR of 15.3% from 2016 to 2023, and a net profit of 7.2 billion CNY, reflecting a CAGR of 18.5% [18]. - The company’s gross margin has improved, with a gross margin of 31.4% in 2023, up from 30.5% in 2017 [19]. 4. Growth Drivers - The company is actively expanding its product lines into high-end valve markets, including deep-sea and nuclear valves, which are expected to contribute significantly to revenue growth [13][19]. - Strategic partnerships with major global energy companies are enhancing the company's market position and driving demand for its products [1][25]. 5. Profitability Forecast - The company is expected to achieve a net profit of 9.1 billion CNY in 2024, with an EPS of 1.20 CNY, and a projected net profit growth of 19% over the next three years [1][2].