GRI(600894) 国信证券·2024-11-15 00:32Investment Rating - The report assigns an "Outperform" rating to the company, with a reasonable valuation range of 13.27 - 15.32 RMB [2] Core Views - The company is a leading domestic elevator manufacturer, with two core brands under its control and a 30% stake in Hitachi Elevator (China), which has consistently ranked among the top three in China [2] - The elevator industry is transitioning to a stable growth phase dominated by replacement demand, with government subsidies accelerating this process [2] - The company has achieved resilient performance despite the downturn in real estate completions, with revenue and net profit for the first three quarters of 2024 reaching 4.944 billion RMB and 545 million RMB, respectively, representing a year-on-year change of -7.82% and +8.96% [2] - The company has made significant progress in market expansion and capacity building, with elevator orders and shipments increasing by 20.9% and 15.6% year-on-year in the first half of 2024 [2] - The company has implemented its first equity incentive plan, granted stock options accounting for 3% of the total share capital, and significantly increased its dividend payout ratio to 60.97% in 2024 [2] Financial Performance - The company's revenue and net profit have shown steady growth, with a CAGR of 7.41% and 11.40% from 2017 to 2023, respectively [2] - For the first three quarters of 2024, the company achieved a gross margin of 14.99% and a net margin of 10.73%, representing year-on-year increases of 1.19 and 1.30 percentage points, respectively [2] - The company's revenue and net profit for 2024-2026 are forecasted to be 7.153 billion RMB, 7.355 billion RMB, and 7.567 billion RMB, and 814 million RMB, 878 million RMB, and 939 million RMB, respectively [1][2] Industry Overview - The Chinese elevator market size reached 155.777 billion RMB in 2023, with a year-on-year growth of 8.72%, and elevator unit sales reached 1.2186 million units, a year-on-year increase of 10.68% [2] - The national elevator stock reached 10.6298 million units, with 800,000 and 170,000 units exceeding 15 and 20 years of use, respectively, indicating a vast aftermarket potential [2] - The government has introduced policies to promote the replacement of old residential elevators, with subsidies of 150,000 RMB per unit for replacement and 50,000 RMB per unit for renovation, supplemented by provincial and municipal subsidies [2] Strategic Initiatives - The company has completed the construction of its digital demonstration industrial park, with an annual production capacity of 25,000 units, and the first phase of its Jinan East China Digital Industrial Park project, with an annual production capacity of over 10,000 units [2] - The company has improved the post-investment management framework for Yida Express Elevator, with Yida Express Elevator's direct controlling shareholder changing from Guangri Elevator to Guangri Co., Ltd., advancing the dual-brand strategy [2] - The company has increased its R&D investment, with R&D expenses growing at a CAGR of 7.19% from 2017 to 2023, and is focusing on digital transformation and the development of new energy vehicle parts, industrial robots, and other emerging industries [17] Valuation and Investment Recommendation - The report forecasts the company's net profit for 2024-2026 to be 814 million RMB, 878 million RMB, and 939 million RMB, respectively, with corresponding PE ratios of 13x, 12x, and 11x [2][38] - The one-year reasonable valuation range is 13.27-15.32 RMB, corresponding to a 2025 PE of 13-15x, and the report initiates coverage with an "Outperform" rating [2][38]