Investment Rating - The report assigns a "Buy" rating for the company for the first time [3]. Core Views - Fengmao Co., Ltd. is recognized as a national-level specialized and innovative "little giant" enterprise in precision rubber components, with a strong position in the domestic rubber drive belt market and a growing presence in the aftermarket [3][19]. - The company is expected to achieve revenue of 1.185 billion, 1.458 billion, and 1.794 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding net profits of 203 million, 255 million, and 314 million yuan [3][6]. - The current price-to-earnings (PE) ratios for 2025, 2026, and 2027 are projected to be 18.5, 14.8, and 12.0 respectively, indicating a favorable valuation compared to peers [3][6]. Company Overview - Fengmao Co., Ltd. has been deeply engaged in the rubber industry for many years, with products widely used in automotive and industrial machinery sectors [19]. - The company has established a stable management team with core technical personnel holding key positions [24][27]. - The financial performance shows steady growth in revenue and profit, with overseas sales primarily focused on Europe [29]. Transmission System - The transmission system is a core component of automotive engines, with significant applications in various industrial fields [43]. - The company has achieved a revenue of 682 million yuan from the transmission system in 2024, representing a year-on-year growth of 25.2% [4][33]. - The gross margin for the transmission system is reported at 30.7% for 2024, reflecting the company's competitive edge in performance and cost [4][33]. Financial Summary and Valuation Indicators - The company’s revenue for 2023 was 802 million yuan, with a year-on-year growth of 31.8% [6]. - The projected gross margin for 2025 is 30.4%, with net profit margins expected to stabilize around 17.1% [6][38]. - The company has set ambitious targets for revenue and net profit in its equity incentive plan, aiming for 1.25 billion yuan in revenue and 216 million yuan in net profit by 2025 [40][41].
丰茂股份：公司首次覆盖报告：橡胶件隐形冠军，传动系统综合供应商-20250425