Anhui Ronds Science & Technology Incorporated Company(SH:688768) Guotai Junan Securities·2024-02-26 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to 68.73 CNY, down from the previous 99.29 CNY [9][10]. Core Views - The company is positioned as a leader in the industrial equipment intelligent operation and maintenance sector, with established advantages in technology, brand, and market presence. Future performance growth is anticipated due to increased penetration of fault diagnosis and monitoring services within the industry [6][10]. - Despite a decline in overall performance in 2023, the company is expected to see significant improvements in net profit in the fourth quarter, driven by the gradual rollout of its "Lingzhi SuperCare" platform [10][15]. - The company’s revenue projections for 2023-2025 are 4.98 billion CNY, 7.73 billion CNY, and 10.33 billion CNY, respectively, with net profits of 0.63 billion CNY, 1.65 billion CNY, and 2.21 billion CNY, respectively [15][36]. Revenue and Profit Forecast - The total revenue and profit forecasts for the company are as follows: - 2023: Revenue of 4.98 billion CNY, net profit of 0.63 billion CNY, EPS of 0.77 CNY - 2024: Revenue of 7.73 billion CNY, net profit of 1.65 billion CNY, EPS of 2.02 CNY - 2025: Revenue of 10.33 billion CNY, net profit of 2.21 billion CNY, EPS of 2.70 CNY [15][36]. Valuation - The report employs both PE and PS valuation methods, concluding a reasonable market value of 56.10 billion CNY, corresponding to a target price of 68.73 CNY. The company is assigned a PE of 34 for 2024 based on its competitive advantages in the industrial equipment maintenance sector [20][36]. - The average PS for comparable companies is 4.53, and the company is given a PS of 7.3 for 2024, reflecting its strong market position and growth potential [37][38]. Industry Insights - The report highlights the company's focus on the industrial internet sector, emphasizing its capabilities in predictive maintenance and operational reliability for various industries, including wind power, petrochemicals, metallurgy, and cement [10][36]. - The company has successfully connected over 120,000 critical devices and has accumulated a wealth of fault case data, enhancing its competitive edge in the market [37]. Financial Summary - The financial summary indicates a total market capitalization of 2,261 million CNY, with a stable gross margin projected around 62.96% to 65.35% over the forecast period [9][10].