Shanghai Bloom Technology (SH:603325) Southwest Securities·2024-04-28 12:30Investment Rating - The report assigns a "Buy" rating for the company with a target price of 85.60 CNY over the next six months [2][17]. Core Insights - The company, Bolong Technology, is a leader in synthetic resin pneumatic conveying systems and is expected to benefit from the upgrade and renovation of petrochemical equipment [10][17]. - The company has shown stable revenue growth, with a compound annual growth rate (CAGR) of 34.6% from 2018 to 2023, increasing revenue from 280 million CNY to 1.22 billion CNY [35]. - The company has a clear and stable shareholding structure, with the chairman and six others being the actual controllers, holding a combined 41.37% of the shares [40][68]. Summary by Sections 1. Business Performance - The company reported a revenue of 1.22 billion CNY in 2023, a year-on-year increase of 17.5%, and a net profit attributable to the parent company of 290 million CNY, up 21.5% [17]. - The revenue from the complete conveying system, which constitutes about 80% of total revenue, reached 950 million CNY in 2023, growing by 11% year-on-year [15][17]. - The gross margin for the complete conveying system was 34.4% in 2023, showing a slight increase from the previous year [15]. 2. Profit Forecast and Valuation - The forecast for net profit attributable to the parent company is 357 million CNY for 2024, 512 million CNY for 2025, and 619 million CNY for 2026, with corresponding EPS of 5.35, 7.67, and 9.29 CNY [17][43]. - The company is expected to maintain a stable gross margin of around 34.5% to 34.7% for its complete systems from 2024 to 2026 [43][71]. - The report anticipates a compound annual growth rate of 29.15% for net profit over the next three years, supported by a strong order backlog [17][43]. 3. Market and Industry Context - The company is positioned to benefit from the ongoing upgrade cycle in petrochemical equipment, as many facilities built in the 1980s and 1990s are due for renovation [17]. - The company has signed new orders worth 2.65 billion CNY in 2023, a 74.7% increase year-on-year, indicating strong demand across various sectors including new materials and food [17][35].