CCA(SH:603100) Huaxin Securities·2025-04-09 02:23Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [2][10]. Core Insights - The company is positioned to benefit from the growth in the domestic instrumentation and automation industry, driven by policy support and high demand from downstream sectors such as petrochemicals and power [5]. - The company has a comprehensive product line and has made significant advancements in R&D, with a notable increase in new automation solutions and patents [6]. - The company is accelerating its global expansion, with a significant increase in export revenue and new orders, particularly in emerging markets [7][9]. Summary by Sections Market Performance - The company's stock price is currently at 21.88 CNY, with a total market capitalization of 112 billion CNY and a 52-week price range of 15.76 to 28.29 CNY [2]. Industry Dynamics - The instrumentation and automation industry in China reached a market size of 1.08 trillion CNY in 2024, with a year-on-year growth of 4.3% [5]. - The domestic brands in the control valve industry accounted for 44.38% of the sales in 2022, indicating a strong trend towards domestic substitution [5]. Competitive Advantages - The company has invested 2.64 billion CNY in R&D in the first half of 2024, reflecting a 4.67% increase year-on-year, with a R&D expense ratio of 7.05% [6]. - The company has established a strategic partnership with China National Machinery Group, enhancing its market influence and resource integration [6]. Financial Forecast - Revenue projections for 2024, 2025, and 2026 are 79.24 billion CNY, 88.22 billion CNY, and 100.92 billion CNY, respectively, with corresponding EPS of 1.57 CNY, 1.77 CNY, and 2.07 CNY [10][12]. - The company is expected to maintain a strong growth trajectory, benefiting from technological advancements, capacity expansion, and international market penetration [10].