Core Viewpoint - The wind power industry is experiencing significant growth as the global energy structure shifts towards clean energy, with Dayun Heavy Industry Co., Ltd. (referred to as "the company") showcasing its operational achievements and strategic layout during its 2024 annual and Q1 2025 performance briefing [2] Group 1: Financial Performance - In 2024, the company achieved an operating income of 4.696 billion yuan, a year-on-year increase of 0.87% [2] - The net profit attributable to shareholders reached 624 million yuan, reflecting a year-on-year growth of 29.55% [2] Group 2: Product Development and Market Position - The company focuses on expanding its core product lines in wind power castings and plastic machinery castings while actively researching nuclear power equipment and alloy steel, establishing a unique competitive advantage in heavy machinery [3] - The company has developed a production capacity exceeding 700,000 tons annually, becoming a major supplier of wind power castings and injection molding machine castings globally [3] - The company has successfully participated in the development of large megawatt wind turbine products, achieving mass shipments of domestic megawatt models and offshore wind turbine products [3] Group 3: Technological Advancements - The company has developed a unique ductile iron thick-section technology that enhances the performance of megawatt wind turbine shaft products to the level of forged shafts while reducing production costs, significantly strengthening its competitive edge in the wind power sector [3] - In the alloy steel segment, the company has successfully developed low-alloy steel and chromium-molybdenum steel cast products, achieving batch shipments and expanding its product offerings to meet the needs of large die-casting machines for new energy vehicles [4] Group 4: Future Outlook and Diversification - The company is in the process of upgrading its cast steel business, with significant revenue growth expected in 2024, although margin improvements are anticipated to begin in 2025 [5] - The company is investing in the industrialization of nuclear waste storage tank projects, having completed process standardization and resource preparation, and is poised to enter the market soon [5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook based on its position in the wind power industry and potential for growth in new business areas [4]. Core Views - The company achieved a revenue of 4.696 billion yuan in 2024, a slight increase of 0.87% year-on-year, with a net profit of 624 million yuan, reflecting a significant growth of 29.55% [1][2]. - The demand for wind power construction is expected to accelerate, benefiting the company as it has established a production capacity of 700,000 tons for casting and 420,000 tons for precision machining [3]. - The company is actively expanding into nuclear power and alloy steel sectors, which could further enhance its growth potential [3]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of 4.696 billion yuan, with a net profit of 624 million yuan, and a proposed cash dividend of 0.35 yuan per share [1]. - The first quarter of 2025 showed a revenue of 1.301 billion yuan, a year-on-year increase of 86.41%, and a net profit of 121 million yuan, up 39.14% year-on-year [1]. Market Demand and Sales - The domestic wind power construction demand showed signs of recovery in 2024, leading to a slight increase in sales volume, particularly in casting products, which grew by 9.58% to 490,400 tons [2]. - The revenue from ductile iron products decreased by 5.30% to 4.266 billion yuan, with a decline in gross margin [2]. Production Capacity and Business Expansion - The company has been steadily advancing its production capacity, with plans to increase precision machining capacity to 540,000 tons, enhancing its integrated delivery capabilities [3]. - The alloy steel business achieved a revenue of 78 million yuan in 2024, marking a growth of 50.71% year-on-year, indicating successful diversification efforts [3]. Profitability and Valuation - The report projects net profits for 2025-2027 to be 702 million, 821 million, and 910 million yuan respectively, with corresponding EPS of 0.68, 0.80, and 0.88 yuan [4][5]. - The current stock price corresponds to a P/E ratio of 17 for 2025, 15 for 2026, and 13 for 2027, suggesting a favorable valuation in the context of expected earnings growth [4].