液压件为基，剑指精密传动

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Viewpoints - The domestic excavator demand cycle is at a low point, and the company's performance is expected to turn upward. Excavator sales in China have declined for three consecutive years, with 2023 sales at 89,980 units, down 69.3% from the peak of 292,900 units in 2020. It is anticipated that demand will bottom out in 2024, leading to a potential growth inflection point for the company's performance [1][31] - The company is actively pursuing a diversification strategy, expanding into industrial sectors and non-excavator markets. The company has established deep partnerships with leading manufacturers in the high-altitude machinery sector and is entering the high-end agricultural machinery market, which has a significant import substitution potential [1][22] - The linear actuator project is set to commence production, opening new growth opportunities. The company has established a subsidiary to develop electric cylinders and ball screws, with production capacity expected to reach approximately 2 billion RMB upon full operation [1][22] Summary by Sections Investment Logic - The report highlights that the company has become a rare comprehensive hydraulic component leader in China, evolving from a single hydraulic cylinder manufacturer to a large-scale enterprise covering various hydraulic products [23] - The company has a strong market position, with over 50% market share in excavator cylinders and over 30% in small excavator pumps and valves, indicating robust competitive strength [22][24] Financial Forecasts and Valuation - The projected net profits for 2023-2025 are 2.5 billion, 2.8 billion, and 3.25 billion RMB, respectively, with corresponding P/E ratios of 28, 25, and 22 times [2] - The report emphasizes the potential for growth in the high-altitude machinery and agricultural machinery markets, with a compound annual growth rate (CAGR) expected to exceed 30% from 2024 to 2025 [1][22] Market Dynamics - The global hydraulic market is estimated to be around 30.68 billion euros, with the company holding a market share of approximately 3.8%. The report suggests that the company has 3-5 times the growth potential compared to foreign competitors [22][26] - The report notes that the company is well-positioned to benefit from the increasing demand for hydraulic components in various sectors, including construction machinery and industrial applications [1][22]