Jiangsu Hengli Hydraulic CO.(601100) 国泰君安·2024-04-23 13:32Investment Rating - The report maintains a Buy rating for Hengli Hydraulic (601100) with a target price of 68.48 CNY [1][4] - The previous target price was 75.24 CNY, and the current price is 52.93 CNY [1] Core Views - The company's performance in 2023 and Q1 2024 met expectations, with steady growth in non-standard oil cylinder products and rapid progress in screw products, which are expected to open further growth opportunities [1] - The company's revenue in 2023 reached 8.985 billion CNY, a year-on-year increase of 9.6%, with net profit of 2.499 billion CNY, up 6.7% [1] - In Q1 2024, the company achieved revenue of 2.362 billion CNY and net profit of 602 million CNY, showing a slight decline compared to the previous year [1] - The company's gross margin and net profit margin in 2023 were 41.9% and 27.8%, respectively, with stable profitability and excellent cost control [1] - The company's overseas strategy is progressing well, with a hydraulic component production base in Mexico expected to start trial production in Q2 2024, and subsidiaries in Singapore and Brazil contributing to global expansion [1] Financial Summary - The report forecasts revenue for 2024E, 2025E, and 2026E to be 10.175 billion CNY, 11.888 billion CNY, and 14.052 billion CNY, respectively [1][3] - Net profit is expected to grow to 2.870 billion CNY in 2024E, 3.409 billion CNY in 2025E, and 3.874 billion CNY in 2026E [1][3] - EPS for 2024E, 2025E, and 2026E is projected to be 2.14 CNY, 2.54 CNY, and 2.89 CNY, respectively [1][3] - The company's operating profit margin is expected to increase from 27.2% in 2023A to 28.4% in 2024E and 29.8% in 2025E [1][3] Valuation and Peer Comparison - The report uses a PE-based valuation method, assigning a 32x PE for 2024E, higher than the peer average of 27.0x, reflecting the company's leading position in the hydraulic industry and its growth potential from new products and overseas markets [4][5] - Comparable companies include Yantai Eddie Precision Machinery, Changling Hydraulic, Best Precision Industrial, and Inovance Technology, with Hengli Hydraulic's 2024E PE of 24.73x being lower than the peer average of 27.0x [4][5] Industry and Market Position - Hengli Hydraulic is a leading company in the hydraulic components industry, with a diversified product portfolio including high-pressure oil cylinders, hydraulic pumps, valves, and systems [2] - The company's global strategy is expanding, with significant growth in overseas markets, particularly in high-machinery and agricultural machinery sectors [1] - The company's screw and guide rail products are expected to contribute to future growth, with trial production of samples starting in Q1 2024 [1]