Changjiang Securities·2025-06-22 14:13Investment Rating - The report assigns a "Buy" rating for the company [11]. Core Viewpoints - The company has been deeply engaged in the refrigeration valve industry for over 30 years and is a global leader in this field. The downstream demand for refrigeration components is showing a marginal improvement, and the increasing penetration of variable frequency air conditioners is expected to drive demand for high-priced valves, leading to stable revenue growth for the company. Additionally, the company is actively expanding into the thermal management business for electric vehicles, leveraging its technological advantages to capture market share [3][6][9]. Summary by Sections Company Overview - The company is a global leader in the refrigeration components industry, with a market share of 38.2% for shut-off valves, 45.0% for four-way valves, and 32.5% for electronic expansion valves projected for 2025-2027. The company has faced challenges in the past due to aggressive diversification and financial difficulties of its former controlling shareholder, but has since stabilized its operations under the ownership of Gree Electric Appliances [6][7][9]. Competitive Position and Market Outlook - The company maintains a leading position in the refrigeration valve market due to high entry barriers and strong customer relationships. The demand for household air conditioning is improving, and the company is well-positioned to benefit from this trend. The forecasted market shares for the company in various valve segments are expected to increase steadily from 2025 to 2027 [7][8]. New Growth Opportunities - The global electric vehicle market is experiencing significant growth, with a CAGR of 48.8% from 2014 to 2024. The complexity of thermal management systems in electric vehicles is expected to create substantial demand for valves, which the company is well-equipped to meet. The company has already established a competitive edge in large-diameter valves and aims to secure first-tier supplier opportunities with major manufacturers [8][9]. Financial Projections - The company is projected to achieve net profits of 1.178 billion, 1.339 billion, and 1.521 billion yuan for the years 2025 to 2027, with corresponding price-to-earnings ratios of 10.02, 8.82, and 7.76 [9].