WOLONG ELECTRIC(600580) Great Wall Securities·2024-05-21 05:02Investment Rating - The report initiates coverage with an "Accumulate" rating for the company, which is a leader in the motor industry, emphasizing its strategic development across three growth curves [1]. Core Views - The company is focusing on stabilizing its motor business while rapidly advancing in the new energy sector and developing comprehensive system solutions involving motors, frequency converters, upper-level machines, sensors, and more. This strategy is expected to unlock significant market potential in the future [1]. - The projected net profits for the company from 2024 to 2026 are estimated to be 1.102 billion, 1.263 billion, and 1.542 billion yuan, respectively, with corresponding EPS of 0.84, 0.96, and 1.18 yuan, and PE ratios of 17.3, 15.1, and 12.4 times [1]. Financial Performance Summary - The company's revenue for 2023 is reported at 15.567 billion yuan, reflecting a year-on-year growth of 3.8%. The net profit attributable to the parent company is 530 million yuan, down 33.7% year-on-year [30]. - The industrial motor segment achieved revenue of 9.645 billion yuan in 2023, with a growth rate of 10.02% and a gross margin of 29.58%. The daily-use motor segment reported revenue of 3.111 billion yuan, down 3.99% year-on-year, with a gross margin of 16.59% [8]. - The overall profitability of the company showed a slight decline, with sales gross margin and net margin at 25.16% and 3.55%, respectively, reflecting a year-on-year change of +1.45 percentage points and -2.04 percentage points [8]. Market Dynamics - The company is positioned as a leader in the motor industry, with significant advancements in high-voltage drive solutions, new energy vehicle motors, and high-end household motors. The demand for industrial motors is expected to grow due to government initiatives promoting large-scale equipment updates [6]. - The company has also been expanding its overseas market presence, particularly in North America and Europe, which are key markets for electric tools [6]. Future Outlook - The company is expected to benefit from the ongoing development in the low-altitude economy and has made strides in the electric aviation sector, with successful collaborations and product developments [28]. - The report highlights the potential for growth in the new energy sector, particularly through the company's subsidiary, which has been securing multiple overseas orders [31].