LXBY(SZ:002884) Guolian Securities·2024-06-13 22:35Investment Rating - The report assigns a "Buy" rating to the company with a target price of 23 CNY per share, based on an 18x PE for 2024 [11][42]. Core Views - The company is expected to benefit from the recovery of the U.S. real estate market and the upcoming active replenishment cycle in inventory, particularly in the building materials sector [8][65]. - The report highlights that the U.S. is currently in a passive destocking phase, but the building materials related to real estate are about to enter an active replenishment cycle [4][15]. Summary by Sections U.S. Inventory Cycle - The U.S. has been in a passive destocking phase since September 2022, with inventory levels declining and demand showing signs of recovery as of June 2023 [1][4]. - Most retail sectors have reached the bottom of the inventory cycle, with inventory growth rates for related sectors like furniture and building materials falling below historical averages [4][7]. Company Performance and Projections - The company is projected to achieve revenues of 1.58 billion CNY, 1.81 billion CNY, and 1.99 billion CNY for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 20%, 15%, and 10% [11][42]. - Net profit attributable to the parent company is expected to be 460 million CNY, 530 million CNY, and 580 million CNY for the same years, with corresponding growth rates of 20%, 15%, and 10% [11][42]. Market Dynamics - The report notes that the demand for building materials in the U.S. is strong, indicating that the current passive destocking phase is nearing its end, leading to an active replenishment cycle [7][15]. - The company’s plastic bathroom pumps are primarily exported to the U.S., where demand is expected to rise due to the recovery in the real estate market [86][87]. Competitive Landscape - The report indicates that the domestic centrifugal pump market is fragmented, with the top 10 companies holding about 15% market share, suggesting a favorable environment for leading companies to gain market share [28][29]. - The global centrifugal pump market is projected to grow, with the domestic market expected to reach approximately 145 billion CNY by 2024 [82][84]. Financial Metrics - The company’s revenue has grown from 1.1 billion CNY in 2018 to 1.32 billion CNY in 2023, with a five-year CAGR of 4% [51]. - The gross margin and net margin have improved from 30% and 20% in 2018 to 38% and 29% in 2023, respectively, indicating enhanced profitability [52][75].