ShaanGu(601369) 国投证券·2024-05-26 13:02Investment Rating - The report assigns a "Buy-A" rating to the company, with a target price of 11 CNY based on a 17x PE for 2024 [4]. Core Insights - The company is a leading player in the domestic turbine machinery sector, continuously expanding into new industries such as chemicals and energy, and developing new products and fields [4]. - The company is expected to benefit from the energy transition and emission reduction opportunities, particularly in compressed air energy storage, hydrogen energy, and carbon capture [4]. - Projected net profits for 2024-2026 are estimated at 1.13 billion, 1.31 billion, and 1.51 billion CNY, representing year-on-year growth of 10.2%, 15.9%, and 15.2% respectively [4]. Company Overview - The company, Shaanxi鼓动力, is a large equipment manufacturing firm focused on turbine machinery design and manufacturing, providing solutions and services to key industries such as petroleum, chemicals, metallurgy, power, urban construction, and environmental protection [10]. - The company has undergone multiple business transformations to seek diversification, evolving from a single equipment manufacturer to a solution provider and service provider [10][11]. - The company has established a comprehensive business model centered around distributed energy systems, covering equipment, services, operations, EPC, finance, and intelligent solutions [10]. Financial Analysis - The company has maintained a stable gross margin around 20%, with a slight decline to 21.5% in 2023, while the net profit margin has improved to 10.1% [51]. - The company has a strong cash position, with cash and cash equivalents increasing from 21.3% to 41.3% from 2019 to 2023, indicating robust financial health and capacity for new project investments [34]. - The company has consistently maintained a high dividend payout ratio, averaging 64.7% over the past five years, with a dividend yield close to 5% [23]. Market Position and Competition - The company has a dominant position in the metallurgy sector, with over 90% market share in high furnace energy recovery turbines and a significant presence in the chemical sector [52][76]. - The company is actively expanding its presence in the energy sector, particularly in compressed air energy storage and CO2 capture, with a notable increase in revenue contribution from these areas [27]. - The company is also exploring international markets, with overseas revenue contributing an average of 11% since 2014, capitalizing on opportunities from the Belt and Road Initiative [27].