NEWAY(603699) Soochow Securities·2025-01-26 14:23Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance [1][9]. Core Insights - The company is expected to achieve a net profit attributable to shareholders of between 1.02 billion to 1.33 billion RMB in 2024, representing a year-on-year growth of 41% to 84%, with a midpoint estimate of 1.18 billion RMB, reflecting a 63% increase [2]. - The fourth quarter of 2024 is projected to see a net profit of 190 million to 500 million RMB, with a significant year-on-year growth of 44% to 277%, and a midpoint of 350 million RMB, indicating a 160% increase [2]. - Key growth drivers include breakthroughs in overseas markets and major client expansions, a favorable demand in emerging sectors such as marine engineering and nuclear power, and improvements in internal management and production efficiency [2][3]. Financial Projections - The company’s total revenue is forecasted to grow from 5.54 billion RMB in 2023 to 6.23 billion RMB in 2024, representing a year-on-year increase of 12.41% [1][10]. - The net profit attributable to shareholders is projected to rise from 721.8 million RMB in 2023 to 1.175 billion RMB in 2024, marking a growth of 62.80% [1][10]. - Earnings per share (EPS) is expected to increase from 0.94 RMB in 2023 to 1.53 RMB in 2024 [1][10]. Capacity Expansion - The company has been expanding its production capacity systematically, including plans to establish a wholly-owned subsidiary in Saudi Arabia and a new subsidiary in Vietnam to enhance competitiveness in the Middle East and North America [3]. - An investment of 220 million RMB is planned to expand precision casting capacity, which is crucial for valve performance [3]. - A further investment of at least 500 million RMB is earmarked for the second phase of the Nuway Fluid expansion project, focusing on high-end valves suitable for harsh conditions [3]. Management and Strategic Focus - Since the new management team took office at the end of 2022, the company has entered a phase of rapid expansion, leveraging opportunities from the Belt and Road Initiative and actively pursuing overseas oil and gas markets [4]. - The management has implemented a rolling equity incentive plan to enhance team motivation and performance [4]. - The company is recognized as a leading domestic industrial valve manufacturer with a strong market position and is expected to maintain long-term growth [4].