CCA(SH:603100) Huaan Securities·2025-03-31 10:23Investment Rating - The investment rating for the company is "Buy" (首次) [1] Core Views - The company is a leading player in the industrial automation instrument sector, with steady growth in revenue and net profit. The main revenue source is the industrial control system and engineering package, accounting for over 80% of total revenue, with a CAGR of 16.6% from 2017 to 2023 [5][19]. - The company has introduced a share incentive plan in 2022, reflecting confidence in its future growth. In January 2025, the company welcomed China National Machinery Industry Group as a shareholder, which is expected to enhance strategic positioning and business collaboration [5][31]. Company Overview - The company is a key player in the industrial automation instrument and control device sector, established in 1999, and has become a leading manufacturer in China's industrial control system sector [16][17]. - The company’s main products include smart actuators, smart transmitters, smart control valves, and various other instruments, with a comprehensive product range [17][22]. - The company achieved a revenue of 74.11 billion yuan in 2023, representing a year-on-year growth of 16.3% [5][23]. Industry Analysis - The industrial automation instrument market in China is projected to reach 1.08 trillion yuan by 2024, with a CAGR of 4.7% from 2018 to 2024, driven by policy support and downstream demand [6][39]. - The industrial control system manufacturing sector is the largest sub-sector within the instrument industry, holding a market share of 34.68% in 2019, with a market space exceeding 300 billion yuan [42][44]. - The high-end market is primarily dominated by large multinational corporations, indicating significant potential for domestic brands to increase their market share through import substitution [49][52]. Company Analysis - The company is transitioning towards becoming a comprehensive solution provider, enhancing its product offerings and expanding into new markets, including lithium batteries and pharmaceuticals [8][9]. - The company has maintained a strong focus on R&D, with a research and development expenditure of 524 million yuan in 2023, reflecting a year-on-year increase of 15.3% [11][31]. - The company is expanding its production capacity and enhancing efficiency through digitalization initiatives, with a capacity increase of 10%-37% for key products [11][23]. Profit Forecast and Investment Recommendations - Revenue forecasts for 2024-2026 are 79.46 billion yuan, 87.15 billion yuan, and 95.65 billion yuan, respectively, with net profits projected at 8 billion yuan, 9.07 billion yuan, and 10.38 billion yuan [9][10]. - The company’s current stock price reflects a P/E ratio of 13.8, 12.2, and 10.6 for the years 2024-2026, indicating a favorable valuation compared to peers [9][10].