Jiangsu Hengli Hydraulic CO.(601100) 华创证券·2024-05-15 12:02Investment Rating - The report assigns a "Strong Buy" rating to the company, with a target price of 65.00 CNY, indicating a potential upside of approximately 19% from the current price of 54.36 CNY [2][6]. Core Insights - The company has established itself as a leading player in the hydraulic cylinder market, leveraging its strong product quality and rapid service response to gain market share in the domestic excavator market. The company has successfully transitioned from being a domestic supplier to a global player, supplying to major international brands like Caterpillar [5][10]. - The company has diversified its product offerings beyond hydraulic cylinders to include hydraulic pumps, valves, and motors, which are expected to replicate the success of its hydraulic cylinder business. This diversification is anticipated to provide significant revenue growth in the coming years [6][12]. - The company has maintained a strong focus on research and development, which has enabled it to enhance its product offerings and expand into high-value segments of the hydraulic market [19][20]. Summary by Sections 1. Company Overview and Market Position - The company was founded in 2005 and has evolved from producing pneumatic components to becoming a leader in high-pressure hydraulic cylinders. It has successfully penetrated the domestic market and is now expanding internationally [1][10]. - The company has established a strong supply chain and customer base, including partnerships with major global brands, which has significantly enhanced its competitive position [10][11]. 2. Financial Performance and Projections - The company reported a revenue of 8.985 billion CNY in 2023, with projections of 9.966 billion CNY in 2024, representing a year-on-year growth of 10.9%. The net profit for 2023 was 2.499 billion CNY, expected to grow to 2.724 billion CNY in 2024 [3][6]. - The report forecasts continued growth in revenue and net profit through 2026, with expected revenues of 11.478 billion CNY and net profits of 3.167 billion CNY by 2025 [3][6]. 3. Product Development and Market Expansion - The company has successfully developed a range of hydraulic products, including non-standard hydraulic cylinders, which have shown steady growth and helped mitigate the cyclical nature of the construction machinery market [1][5]. - The company is actively expanding its product lines to include high-end hydraulic components and linear drive systems, which are expected to enhance its market competitiveness and open new growth avenues [6][12]. 4. Competitive Landscape and Industry Trends - The hydraulic market is experiencing steady growth, with increasing demand for hydraulic components in various sectors, including construction, agriculture, and industrial applications. The company is well-positioned to capitalize on these trends due to its established market presence and product innovation [4][10]. - The report highlights the potential for domestic brands to gain market share in the hydraulic sector, as they continue to improve quality and reduce costs compared to foreign competitors [4][10].