NEWAY(603699) Huaan Securities·2024-10-31 16:30Investment Rating - The investment rating for the company is "Buy" (maintained) as of October 31, 2024 [1]. Core Views - The company reported a year-on-year increase of 34.9% in net profit attributable to shareholders in Q3, indicating an improvement in profitability [1]. - The revenue for Q3 was 4.455 billion yuan, a year-on-year increase of 5.09%, while the net profit attributable to shareholders was 828 million yuan, a year-on-year increase of 40.7%, aligning with expectations [1]. - The gross profit margin for Q1 to Q3 of 2024 was 36.72%, up 5.78 percentage points year-on-year, and further increased to 38.89% in Q3, reflecting enhanced profitability [1]. - The company has implemented a stock incentive plan to bind the core team, which is expected to drive sustainable growth and create value for shareholders [1]. - The company is investing 220 million yuan to enhance its upstream production capacity and deepen cooperation with high-end users [1]. Financial Performance Summary - For the first three quarters of 2024, the company achieved revenue of 4.455 billion yuan and net profit of 828 million yuan, with a net profit margin of 18.74%, up 4.72 percentage points year-on-year [1]. - The Q3 net profit margin reached 21.08%, marking a new high in recent years, benefiting from product structure optimization and operational efficiency [1]. - The company forecasts revenues of 6.302 billion yuan, 7.034 billion yuan, and 7.852 billion yuan for 2024, 2025, and 2026 respectively, with net profits of 1.008 billion yuan, 1.132 billion yuan, and 1.274 billion yuan for the same years [3][5]. Valuation Metrics - The projected EPS for 2024, 2025, and 2026 is 1.33 yuan, 1.49 yuan, and 1.68 yuan respectively, with corresponding PE ratios of 17, 15, and 13 times [3]. - The company is positioned as a leading player in the domestic industrial valve market, with expectations of maintaining competitive advantages through upstream supply chain and product channel strategies [3].