CSICPCL(SH:600482) Southwest Securities·2024-02-22 16:00Investment Rating - The report initiates coverage with a recommendation to continuously monitor the company [3][4]. Core Views - The global shipbuilding cycle is on the rise, positively impacting the upstream ship equipment industry. The company has signed new low-speed engine orders worth 6.99 billion yuan, a year-on-year increase of 30.6% [3][4]. - The company's diesel engine business is expected to benefit significantly from the current shipbuilding cycle, with a projected net profit increase of 95.4% to 146.5% year-on-year for 2023 [3][4]. - The demand for LNG and methanol-fueled vessels is increasing due to stricter maritime emission regulations, and the company has secured bulk orders for methanol-fueled engines, marking a breakthrough [3][4]. Summary by Sections 1. Business Overview - The company has transformed into a comprehensive power solution provider, integrating high-end power equipment research, manufacturing, system integration, sales, and services. It has undergone significant restructuring since 2015, enhancing its competitiveness in the diesel engine sector [11][12]. 2. Market Dynamics - The recovery of the shipping market has led to improved operating conditions for shipowners, prompting new shipbuilding orders to replace aging and non-compliant vessels. The container shipping market remains robust, with a notable increase in orders for LNG vessels and bulk carriers expected by the end of 2023 [20][23][25]. 3. Diesel Engine Segment Performance - The diesel engine segment has seen a significant increase in sales and order volume, with revenue from this segment reaching 8.82 billion yuan in the first half of 2023, accounting for 41.4% of total revenue and contributing 46.3% to gross profit [33][34]. - The company anticipates a net profit of 6.5 billion to 8.2 billion yuan for 2023, representing a substantial increase compared to the previous year [38]. 4. Financial Projections - Revenue forecasts for 2023-2025 are 47.43 billion yuan, 53.93 billion yuan, and 62.61 billion yuan, respectively, with net profits projected at 790 million yuan, 1.29 billion yuan, and 2.23 billion yuan [39][40]. - The expected earnings per share (EPS) for the same period are 0.36 yuan, 0.59 yuan, and 1.02 yuan, with corresponding price-to-earnings (PE) ratios of 61, 37, and 22 [39][40].