NEWAY(SH:603699) Southwest Securities·2024-10-29 02:12Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [1]. Core Insights - The company reported significant growth in its financial performance for Q3 2024, with a revenue of 4.46 billion yuan, a year-on-year increase of 5.1%, and a net profit attributable to shareholders of 830 million yuan, up 40.7% year-on-year [1][2]. - The gross margin for Q1-Q3 2024 improved to 36.7%, an increase of 5.8 percentage points year-on-year, driven by product structure optimization and a decrease in raw material prices [2][3]. - The company is well-positioned in the global valve market, which was valued at over 73.2 billion USD in 2021, with a low market concentration allowing for significant growth opportunities [3]. Financial Performance Summary - For Q3 2024, the company achieved a revenue of 1.62 billion yuan, a decrease of 11.0% year-on-year but an increase of 9.4% quarter-on-quarter. The net profit for the same period was 340 million yuan, reflecting a year-on-year increase of 34.9% and a quarter-on-quarter increase of 16.7% [1]. - The comprehensive gross margin for Q3 2024 was reported at 38.9%, up 6.3 percentage points year-on-year, while the net margin reached 21.1%, an increase of 7.1 percentage points year-on-year [2]. - The company expects a compound annual growth rate (CAGR) of 25% in net profit from 2024 to 2026, with projected net profits of 1.01 billion yuan, 1.20 billion yuan, and 1.39 billion yuan for the respective years [3][10]. Business Segment Insights - The industrial valve segment is expected to see revenue growth rates of 20%, 18%, and 15% from 2024 to 2026, supported by high demand in LNG, hydrogen, and photovoltaic sectors [7][8]. - The parts segment, which includes bearings and gears, is projected to maintain a stable growth rate of 20% over the same period, despite increased competition [8]. - The casting and forging segments are anticipated to grow at 15% annually, benefiting from reduced depreciation costs and lower raw material prices [8]. Market Position and Strategy - The company has established a strong global presence with subsidiaries in multiple countries, enhancing its competitive edge in overseas markets [3]. - The domestic market for high-end valves presents significant opportunities for local manufacturers, with a substantial import value of over 56 billion yuan in 2023 [3]. - The company aims to capitalize on the trend of domestic substitution in high-end valve products, particularly in nuclear power and marine engineering applications [3].