ZONGSHEN POWER(001696) 民生证券·2025-02-20 09:19Investment Rating - The report initiates coverage with a "Buy" rating for the company [5] Core Views - The company is a leading player in the domestic small and medium-sized power machinery sector, with steady growth in revenue and net profit over the years. The revenue increased from 993 million yuan in 2003 to 8.151 billion yuan in 2023, with a CAGR of 11.11%. The net profit rose from 53 million yuan to 372 million yuan during the same period, with a CAGR of 10.23% [1][18] - The company is expected to benefit from the growth in general power and motorcycle manufacturing businesses, as well as advancements in the low-altitude economy sector. Forecasted net profits for 2024-2026 are 558 million yuan, 705 million yuan, and 881 million yuan, respectively, with growth rates of 54.2%, 26.3%, and 24.9% [3][4] Summary by Sections Company Overview - The company specializes in the research, manufacturing, and sales of small and medium-sized power machinery products, including engines, general gasoline engines, and motorcycle parts. It has established itself as a leader in motorcycle power, general power machinery, and aviation piston power sectors [1][11] Financial Performance - The company has shown consistent growth in revenue and net profit, with a revenue of 8.151 billion yuan in 2023 and a net profit of 362 million yuan. The revenue for the first three quarters of 2024 reached 7.405 billion yuan, a year-on-year increase of 26%, while net profit grew by 7.2% to 420 million yuan [18][21] General Machinery Business - The general machinery segment has a wide product range, including gasoline engines, small generators, and agricultural machinery. The company exports to over 70 countries and has established long-term partnerships with several well-known domestic and international companies [2][30] Motorcycle Manufacturing Business - The motorcycle manufacturing segment has a comprehensive product lineup, including engines for two-wheelers, three-wheelers, and off-road vehicles. The company has a strong sales network across China and exports to various regions, maintaining a significant market share [2][38] Aviation Power Business - The aviation power segment focuses on developing aviation piston engines for UAVs and light aircraft. The company has created a robust product line and is enhancing its integrated power system technology to meet diverse customer needs [3][50] Profit Forecast and Investment Suggestion - The report forecasts revenue growth for the company, projecting revenues of 9.573 billion yuan, 11.218 billion yuan, and 13.128 billion yuan for 2024, 2025, and 2026, respectively. The corresponding PE ratios are expected to be 52X, 41X, and 33X [4][18]