Core Viewpoint - Company reported steady growth in revenue and net profit for 2024 despite a challenging market environment, driven by strong international business performance and strategic product development across various segments [2][19]. Revenue and Profit Growth - In 2024, the company achieved a revenue increase of 21.99% year-on-year, reaching 4.1 billion yuan, and a net profit increase of 13.84%, amounting to approximately 94.35 million yuan [19]. - The mechanical seal segment saw revenue growth from both incremental and existing markets, with international business revenue reaching 200 million yuan, a 50% increase year-on-year [2]. Segment Performance - The mechanical seal segment maintained stable gross margins despite a slight decline in existing market margins, while the rubber and plastic seal segment experienced a notable net profit increase of 58.67% due to higher-value product sales [2][15]. - The special valve segment secured significant orders in the water conservancy and petrochemical sectors, contributing to substantial revenue and profit growth [2][5]. Research and Development - In 2024, the company focused on several key R&D achievements, including the development of diamond coating technology and a new software for machining rubber and plastic seals [3]. - Future R&D priorities include undertaking national and industry-specific projects, advancing basic technology research, and developing forward-looking products [3]. Cash Flow and Financial Management - The company reported a 3.03% increase in net cash flow from operating activities in 2024, although the first quarter of 2025 saw a negative cash flow due to increased employee costs and higher tax payments [4]. - The company has established a robust system for managing accounts receivable, ensuring low bad debt rates and efficient cash flow management [18]. Market Strategy and Outlook - The company aims for an 11.32% revenue growth and a 5.05% net profit growth in 2025, with strategies focused on market expansion, R&D, and operational efficiency [12]. - The company is actively exploring new markets, including renewable energy and environmental sectors, leveraging its technological advantages [17]. Shareholder Returns - The profit distribution plan for 2024 includes a cash dividend of 5 yuan per 10 shares, reflecting the company's commitment to shareholder returns while considering its growth and capital expenditure needs [14].

Group 1: Financial Performance - In 2024, the company achieved a revenue of 2 billion yuan from international business, marking a year-on-year growth of approximately 50% [3] - The mechanical seal segment saw a year-on-year revenue increase of 17.68% despite a challenging market environment [6] - The net profit of the rubber and plastic sealing segment increased significantly by 58.67% due to enhanced high-value product ratios and cost reduction efforts [7] Group 2: Research and Development - Major R&D achievements in 2024 included the trial production of diamond coatings in the mechanical seal segment and the launch of the UTOSEAL software in the rubber and plastic sealing segment [3] - Future R&D focuses will include undertaking key national and industry research projects, developing market-responsive applications, and enhancing foundational technology research [3] Group 3: Cash Flow and Financial Management - The net cash flow from operating activities increased by 3.03% year-on-year, but the first quarter of 2025 saw a negative cash flow due to increased employee costs and a 21.99% rise in sales revenue [4] - The accounts receivable balance was 160.77% of the net profit, indicating a significant amount of outstanding payments [8] Group 4: Market Strategy and Growth Plans - The company plans to maintain a revenue growth target of 11.32% and a net profit growth target of 5.05% for 2025, with strategies focused on market capture, R&D, and efficiency improvements [6] - The special valve segment is expected to continue its growth trajectory, leveraging strong market demand in oil and gas transportation and water engineering [4] Group 5: Shareholder Returns and Incentives - The profit distribution plan for 2024 includes a cash dividend of 5 yuan for every 10 shares, reflecting the company's commitment to investor returns [7] - The implementation of a restricted stock incentive plan is anticipated to positively impact future performance without diluting shareholder equity [5]

Investment Rating - The report maintains a "Buy" investment rating for the company [2][9] Core Views - The company has achieved steady revenue growth driven by both organic and external factors, with a 14.40% year-on-year increase in revenue to 1.567 billion yuan and a 13.21% increase in net profit to 392 million yuan for 2024 [4][9] - The company has demonstrated strong operational resilience through effective cost control and a high dividend policy, with a proposed cash dividend of 5 yuan per 10 shares for 2024 [4] - Strategic breakthroughs have been made through mergers and acquisitions, with significant contributions from acquired companies and a 50% year-on-year increase in overseas revenue [5][9] - The company is focusing on technological advancements and capacity expansion, with a research and development investment of 75.77 million yuan in 2024 and the successful production of diamond-coated seals [8][9] Summary by Sections Financial Performance - In 2024, the company reported revenue of 1.567 billion yuan, a 14.40% increase year-on-year, and a net profit of 392 million yuan, reflecting a 13.21% growth [4][11] - The gross margin for the year was 48.34%, despite a decline of 1.31 percentage points due to weak demand in the petrochemical industry [4] Mergers and Acquisitions - The company has successfully integrated several acquisitions, including Yutai Technology and New Dipei, with net profits of 29.90 million yuan and 28.18 million yuan respectively, showing significant synergy effects [5] - The acquisition of KS GmbH further strengthens the company's upstream integration capabilities in the rubber and plastic sealing sector [5] International Expansion - The company has seen a notable increase in international business, with overseas revenue reaching 200 million yuan, a 50% increase year-on-year [5] - Successful projects include high-end contracts in Abu Dhabi and Algeria, indicating strong international recognition of the company's technical capabilities [5] Technological Development - The company invested 75.77 million yuan in R&D in 2024, achieving breakthroughs in core technologies and securing 19 patents [8] - Capacity upgrades are ongoing, with the production line for rubber and plastic seals fully operational and efficiency improvements through new management systems [8] Earnings Forecast - The company is projected to achieve revenues of 1.761 billion yuan, 2.015 billion yuan, and 2.239 billion yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 2.16 yuan, 2.50 yuan, and 2.74 yuan [9][11]