Core Viewpoint - Hangyang Co., Ltd. is positioned as a leading supplier in the air separation and industrial gas industry, benefiting from strong government support and a strategic shift towards industrial gas services, particularly in the context of China's growing commercial aerospace sector [1][2][3]. Industry Overview - The aerospace industry is recognized as a strategic pillar for the nation, with policies driving robust growth. The commercial aerospace sector is expected to enter a golden development period from 2024 to 2029, with a projected market size of 6.6 trillion yuan by 2029, reflecting a compound annual growth rate of approximately 23% [1]. - The air separation equipment market in China is anticipated to reach 53.3 billion yuan by 2025, indicating significant growth potential [3]. Company Performance - In Q1 2025, the company reported revenue of 3.565 billion yuan, a year-on-year increase of 7.85%, and a net profit of 223 million yuan, up 13.81% year-on-year. The net cash flow from operating activities reached 424 million yuan, a 46.78% increase [2]. - The total assets of the company stood at 24.564 billion yuan at the end of the reporting period, reflecting a 2.05% year-on-year growth [2]. Technological Advancements - The company is leading the air separation equipment industry with a focus on modularization, intelligence, and low-carbon technology, transitioning towards high-tech and high-value-added sectors [3]. - Hangyang has established a comprehensive R&D system and has been recognized as a national-level "Science and Technology Reform Demonstration Enterprise," with R&D investment of 452 million yuan in 2024, accounting for 3.29% of revenue [5]. Market Position - Hangyang holds a significant market share in the air separation equipment sector, with a leading position in the production capacity and shipment of large equipment [3]. - The company has successfully transitioned from a single equipment manufacturer to a comprehensive service provider, enhancing its competitive edge in the industrial gas market [4][7]. Strategic Initiatives - The company aims to create a world-class gas industry enterprise, focusing on optimizing its engineering and equipment sectors while enhancing project profitability and expanding application scenarios [7]. - The company is also advancing its hydrogen energy, medical health, and electronic specialty gas business units, fostering a collaborative development model across multiple sectors [7].

Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 27.3 yuan [2][8]. Core Views - The company reported a total revenue of 3.56 billion yuan in Q1 2025, representing a year-on-year growth of 7.85%, and a net profit attributable to shareholders of 230 million yuan, up 10.82% year-on-year [2][4]. - The company is expected to benefit from the recovery in gas prices and has a strong order acquisition capability, with numerous gas projects under construction set to enter a peak operational phase [2][8]. - The company has shown improvements in operational quality and cost control, with a net cash flow from operating activities reaching 420 million yuan, a year-on-year increase of 46.78% [2][8]. Financial Summary - The company’s projected total revenue for 2025 is 15.1 billion yuan, with a year-on-year growth rate of 10.1%. The net profit attributable to shareholders is expected to be 1.08 billion yuan, reflecting a growth rate of 16.7% [4][9]. - Key financial metrics include an expected EPS of 1.09 yuan for 2025, with a PE ratio of 18 times [4][9]. - The company’s total assets are projected to reach 26.8 billion yuan by 2025, with a debt-to-equity ratio of 73.3% [9].

Investment Rating - The investment rating for the company is "Buy" [4] Core Views - The company's Q1 2025 performance exceeded expectations, with revenue of 3.56 billion yuan, a year-on-year increase of 7.9%, and a net profit of 230 million yuan, up 10.8% year-on-year. The gross margin improved by 1.6 percentage points to 21.5% [1] - The company is positioned as a leading player in the industrial gas sector, benefiting from both defensive and offensive attributes, with expectations for a recovery in the gas industry following a challenging 2024 [2] - The company has a strong growth trajectory driven by demand growth, market share expansion, and improved profitability, with long-term profit potential expected to increase several times [2][3] Summary by Sections Q1 Performance - Revenue reached 3.56 billion yuan, a 7.9% increase year-on-year - Net profit was 230 million yuan, reflecting a 10.8% year-on-year growth - Gross margin stood at 21.5%, up 1.6 percentage points, while net margin improved to 7% [1] Orders and Contracts - As of the end of Q1, the company's contract liabilities were 2.84 billion yuan, down 10.3% year-on-year - The company won a bid for a coal-to-olefins project in Xinjiang, which includes two air separation units with a total capacity of 220,000 m³/h [1] Growth Drivers - The company is expected to benefit from stable growth in pipeline gas, which is less affected by macroeconomic fluctuations, and aims to increase its market share in the third-party gas supply market significantly [2] - The retail gas segment is positioned for potential growth as gas prices are at historical lows, with significant upside if the economy recovers [2] - The company is the leading domestic manufacturer of air separation equipment, with expectations for steady performance driven by demand from coal chemical projects and overseas markets [3] Financial Forecast - Projected net profits for 2025-2027 are 1.067 billion, 1.298 billion, and 1.513 billion yuan, with year-on-year growth rates of 16%, 22%, and 17% respectively [4]