Inovance(300124) 国信证券·2024-02-25 16:00Investment Rating - Buy (Maintained) [2] Core Views - The company is a leading domestic industrial control enterprise with a comprehensive layout in control, drive, execution, and sensing layers, achieving rapid growth over the past 15 years with a CAGR of 39% in revenue and 35% in profit [11] - The company's revenue structure in 2022 is divided into five major segments: General Automation (50%), Smart Elevator (22%), New Energy Vehicles (22%), Industrial Robotics (2%), and Rail Transit (2%) [11] - The company is focusing on strengthening its control layer and expanding internationally, with significant growth potential in its General Automation business [11] - The company is extending its industrial chain into industrial robotics and new energy vehicles, with the new energy vehicle business entering a harvest phase and showing rapid growth [11] - The company is undergoing a management transformation and digital empowerment in 2024, aiming to build an agile and efficient process-oriented organization to support long-term development [11] Financial Analysis - The company's revenue and net profit have grown at a CAGR of 39.30% and 34.73% respectively from 2007 to 2022, driven by the rapid expansion of its inverter and elevator businesses [28] - The company's gross margin and net margin have declined from 53%/33% in 2013 to 38%/14% in 2019 due to the increasing proportion of lower-margin new energy and rail transit businesses [30] - The company's operating cash flow to net profit ratio has remained stable at around 0.5-0.7, and the cash collection ratio has been maintained at around 0.8, indicating good cash flow management [31] Business Segments General Automation - The company's General Automation business grew by 27.64% in 2022, contributing 50% of total revenue, with leading market shares in low-voltage inverters, servo systems, and PLCs [20] - The company aims to further expand its product portfolio and downstream applications, with significant room for market share growth [20] Smart Elevator - The Smart Elevator business grew by 3.92% in 2022, contributing 22% of total revenue, with a leading market position in elevator control systems and integrated solutions [22] - The business is considered mature, providing stable cash flow, with future growth expected to be steady [22] New Energy Vehicles - The New Energy Vehicle business grew by 70.02% in 2022, contributing 22% of total revenue, with a market share of 7% in motor controllers, ranking third in China [23] - The business is in a rapid growth phase, with significant potential as global new energy vehicle penetration increases [23] Industrial Robotics - The Industrial Robotics business grew by 54.96% in 2022, contributing 2% of total revenue, with a market share of 5.2% in industrial robots and 17% in SCARA robots, ranking second in China [25] - The business is in the early stages of growth, with significant potential as industrial automation and robot replacement trends continue [25] Rail Transit - The Rail Transit business declined by 11.81% in 2022, contributing 2% of total revenue, with challenges due to delayed project deliveries and a decline in domestic rail transit procurement [26] - The business is considered mature, with limited growth prospects in the near term [26] Management and Incentives - The company has a decentralized equity structure with a high proportion of management ownership, and it has implemented long-term equity incentive plans to motivate key personnel [32][37] - The company has conducted six equity incentive plans from 2013 to 2022, with a focus on achieving high performance targets, including revenue and net profit growth [37][39]