Warom Incorporated(603855) 广发证券·2025-02-27 05:07Investment Rating - The report assigns a "Buy" rating to the company [2] Core Views - The company is positioned as a leader in the domestic explosion-proof electrical industry, continuously exploring new products and operational models while maintaining high levels of research and development investment [8] - The explosion-proof electrical market is expected to expand, with a projected CAGR of 11.32% from 2017 to 2025, reaching a market size of 12.4 billion yuan by 2025 [8] - The company has developed the SCS Safety Control System, which represents an innovative breakthrough in the intelligent development of explosion-proof technology [8] - The company is expected to achieve net profits of 507 million yuan, 601 million yuan, and 708 million yuan for the years 2024 to 2026, respectively, with a target price of 26.69 yuan per share based on a 15x valuation of net profit for 2025 [8] Summary by Sections 1. Company Overview - The company has a total share capital of 337.53 million shares and a market capitalization of 6.727 billion yuan [3] - The company's stock price has fluctuated between 14.97 yuan and 23.68 yuan over the past year [3] 2. Financial Performance - Revenue is projected to grow from 3.043 billion yuan in 2022 to 4.789 billion yuan in 2026, with a growth rate of 20.0% in 2024 [7] - The company's EBITDA is expected to increase from 570 million yuan in 2023 to 867 million yuan in 2026 [7] - The return on equity (ROE) is forecasted to rise from 23.8% in 2023 to 27.6% in 2026 [7] 3. Market Dynamics - The demand for explosion-proof electrical products is driven by the rapid development of industries such as oil, chemicals, and mining, with the market size expected to grow significantly [44][48] - The company has a comprehensive range of explosion-proof products, including those for mining and industrial applications, which are crucial for safety in hazardous environments [44][45] 4. Research and Development - The company has increased its R&D investment, reaching 142 million yuan in 2023, with a rising R&D expense ratio [22][29] - The R&D team consists of 561 members, accounting for 22.8% of the workforce, covering various technical fields [26][29] 5. Strategic Initiatives - The company is expanding its overseas market presence and has established a marketing strategy that includes both direct sales and partnerships with international EPC companies [8][20] - The SCS Safety Control System has been successfully implemented in various enterprises, enhancing customer engagement and service offerings [69]