WOLONG ELECTRIC(SH:600580) ZHONGTAI SECURITIES·2024-06-06 06:00Investment Rating - The report assigns a positive investment rating to the company, indicating a favorable outlook for future performance [27]. Core Viewpoints - The company has made significant advancements in high-power density motor drive design for aviation, showcasing its first 100kW variable configuration distributed electric power system in collaboration with COMAC, achieving a power density of 8.5kW/kg, surpassing similar products from competitors [3]. - The micro-specialty motor segment is expected to see stable growth due to improved demand in the air conditioning, washing machine, and refrigerator markets, with a projected market growth rate of over 5% from 2024 to 2026 [4]. - The company is well-positioned to benefit from the rapid development of the low-altitude economy in China, with government support and a projected market size of 505.95 billion yuan in 2023, growing at 33.8% year-on-year [24][47]. Company Main Business and Shareholding Structure - The company has expanded its product range through a series of acquisitions since 2002, including notable purchases of ATB in 2011 and GE's small industrial motor business in 2018, enhancing its capabilities in electric drive systems and industrial motors [7][8]. Revenue Structure and Profit Sources - The company's revenue has shown a stable increase, with total revenue rising from 6.89 billion yuan in 2014 to 15.57 billion yuan in 2023, reflecting a compound annual growth rate of approximately 9.5% [14]. - The main business segments include electric motors and controls, with a notable shift in revenue contribution from electric motor control to solar and energy storage solutions since 2021 [15]. Low-altitude Economy Development - The report highlights the government's proactive measures to support the low-altitude economy, with nearly 50 policies introduced since Q4 2023, including funding initiatives for the industry [23]. - The company is actively involved in setting airworthiness standards for electric aviation propulsion systems, which will help establish barriers to entry in the market [26]. Industrial Motor Market Demand - The industrial motor market is expected to grow steadily, with a projected annual growth rate of 4.3% from 2024 to 2026, supported by the company's increasing market share and improving profit margins [50]. Micro-specialty Motor Demand - The global demand for micro-specialty motors is anticipated to expand, with the company maintaining a stable market share and a gross margin of approximately 16% from 2024 to 2026 [4][50].