DAYUAN PUMP(SH:603757) Huaxin Securities·2025-06-20 09:24Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][10]. Core Insights - The company is expected to benefit from the recovery of the heat pump market in Europe, with a projected return to growth in 2025 as inventory levels decrease and demand rebounds [5]. - The liquid cooling business is experiencing significant growth, establishing a second growth curve for the company, with revenue expected to exceed 0.9 billion yuan in 2024, representing over 80% year-on-year growth [6]. - Continuous investment in research and development has created a strong competitive advantage, with the company holding 542 patents, including 74 invention patents domestically [7]. Summary by Sections Market Outlook - The European heat pump market faced a decline in 2024 due to subsidy policy adjustments and high inventory levels, leading to a 20% decrease in sales of related products. However, a recovery is anticipated in 2025 as demand improves and the company plans to enhance its market presence [5]. Business Performance - The liquid cooling temperature control business is projected to achieve significant revenue growth, with successful partnerships established with major clients like ZTE and Infinera. The company aims to leverage its advantages in leak-free technology to penetrate new markets [6]. Research and Development - The company has made substantial investments in R&D, resulting in a robust patent portfolio and participation in national standards development, enhancing its industry influence and technological capabilities [7]. Financial Projections - Revenue forecasts for 2025-2027 are 21.82 billion yuan, 24.92 billion yuan, and 29.09 billion yuan, respectively, with corresponding EPS of 1.59 yuan, 1.81 yuan, and 2.15 yuan. The current stock price reflects a PE ratio of 13.4, 11.8, and 10.0 for the respective years [10][12].