SUPCON Technology (688777) 信达证券·2024-02-04 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a 2024 target PE of 35x, implying a market cap of 43.225 billion yuan based on the projected net profit of 1.235 billion yuan for 2024 [3] Core Views - The company is a leading provider of intelligent manufacturing solutions for process industries in China, with a comprehensive product portfolio including automation control systems, industrial software, and instrumentation [3] - Short-term growth is driven by domestic substitution opportunities, with the company holding the top market share in key products like DCS, SIS, and APC [3] - Long-term growth is supported by the company's first-mover advantage in intelligent manufacturing, which addresses pain points in process industries and aligns with national strategies for technological advancement and green development [3] - The company's "135 Strategic Control Points" strategy, focusing on business models, product platforms, and technology integration, strengthens its competitive moat [3] - Overseas expansion has yielded significant results, with the company securing major projects and recognition from top international clients like Saudi Aramco, Shell, and BASF [3] - Strategic investments and acquisitions, such as the acquisition of Hobré and stakes in Sinopec Yinke and Wood China, enhance the company's technical capabilities and global presence [3] Financial Projections - Revenue is projected to grow from 8.854 billion yuan in 2023 to 14.997 billion yuan in 2025, with a CAGR of 30.4% [3] - Net profit attributable to shareholders is expected to increase from 1.101 billion yuan in 2023 to 1.589 billion yuan in 2025, with a CAGR of 20.1% [3] - Gross margin is forecasted to remain stable at around 35% from 2023 to 2025 [4] Industry Analysis - The domestic industrial software market is expected to grow from 275.9 billion yuan in 2022 to over 400 billion yuan by 2025, driven by domestic substitution and technological advancements [7] - Process industries are transitioning from Industry 3.0 to Industry 4.0, with intelligent manufacturing becoming a key trend to address industry pain points such as high energy consumption and complex processes [7] - The company's products cover the entire production process of process industries, from enterprise resource planning to field device control, providing comprehensive solutions for intelligent manufacturing [14] Company Overview - The company has a clear equity structure, with the founder and actual controller holding 18.86% of the shares directly and indirectly [17] - The company has implemented multiple equity incentive plans to align the interests of employees and management, with five rounds of equity incentives completed by June 2023 [19][21] - R&D investment reached 692 million yuan in 2022, accounting for 10.45% of revenue, with 2,092 R&D personnel representing 34.20% of total employees [30]