NEWAY(SH:603699) Guotai Junan Securities·2024-04-13 16:00Investment Rating - The investment rating for the company is "Accumulate" with a target price of 21.66 CNY, up from the previous target of 17.58 CNY [2][5]. Core Views - The company is expected to experience rapid growth in performance due to sustained high demand in downstream industries and successful expansion into new business areas such as renewable energy and nuclear power [2][10]. - The company's valve business revenue reached 5.124 billion CNY in 2023, representing a year-on-year increase of 35.96%, with a gross margin of 31.68% [11]. - The company has made significant breakthroughs in new product development, including high-pressure shut-off valves and large-diameter valves, which have filled gaps in the domestic market [11][12]. Summary by Sections Company Overview - The company has been deeply engaged in the valve industry for over 20 years, with a diversified business layout and strong anti-cyclical capabilities. The domestic substitution trend is enhancing downstream demand, particularly in new energy and nuclear power sectors [2][11]. Financial Performance - In 2023, the company achieved a revenue of 5.544 billion CNY, with a net profit of 722 million CNY, reflecting a year-on-year increase of 54.85% [2][5]. - The earnings per share (EPS) for 2024 is projected to be 1.14 CNY, with further growth expected in subsequent years [2][5]. Market Demand - The traditional downstream sectors, including chemicals and oil extraction, are experiencing improved demand, while new business areas such as LNG and hydrogen energy are rapidly growing due to geopolitical factors [10][11]. - The global renewable energy share is expected to increase from 29% to 35% between 2022 and 2025, driving higher demand for industrial valves [10]. Product Development - The company is committed to continuous innovation and has established R&D centers in multiple countries, with a focus on developing advanced valve technologies [12]. - Recent product breakthroughs include the successful delivery of large-diameter valves and the development of liquid hydrogen valves, which meet world-class performance standards [11][12]. Competitive Position - The company holds approximately 3%-4% market share in a domestic valve market valued at around 95 billion CNY, which is largely dominated by foreign brands [11]. - The company continues to strengthen strategic partnerships with major global energy firms, enhancing its competitive edge in the market [11].