Investment Rating - The report initiates coverage with a "Buy" rating for the company [1] Core Views - The company is a core supplier of EGR systems and is actively exploring potential business opportunities in various sectors, including aerospace and humanoid robotics, which are expected to drive future growth [11][20] - The EGR product line is well-established, with stable revenue from commercial vehicles and increasing demand from hybrid vehicles, particularly PHEVs [11][12] - The company has successfully transitioned into the new energy sector, particularly in manufacturing motor cores, which is projected to see significant market growth [11][12] - The strategic layout in humanoid robotics and aerospace manufacturing is expected to create synergistic effects and open new growth avenues [11][12] Financial Data and Profit Forecast - Total revenue is projected to reach CNY 2,397 million in 2024, with a year-on-year growth rate of 31.2% [2] - Net profit attributable to the parent company is expected to be CNY 224 million in 2024, reflecting a year-on-year increase of 52.8% [2] - Earnings per share are forecasted to be CNY 0.98 in 2024, with a gross margin of 18.0% [2] - The company anticipates a net profit of CNY 296 million in 2025, with a growth rate of 32.1% [12] Market Data - The company has established a strong market position in the EGR sector, serving major clients such as BYD, Geely, and Chery, which positions it well to benefit from the increasing penetration of PHEVs [11][12] - The new energy motor core market is expected to reach nearly CNY 10 billion by 2025, with the company poised to capture significant market share [11][12] Business Segments - The company operates three main business segments: EGR systems, new energy motor cores, and precision components, with the new energy segment showing rapid growth [20][23] - The EGR system segment is projected to generate CNY 730 million in revenue in 2024, accounting for 30% of total revenue [23] - The new energy segment is expected to contribute CNY 1,034 million in revenue in 2024, representing 43% of total revenue [23] Valuation - The report estimates a target market capitalization of CNY 11.1 billion based on a 2025 price-to-earnings ratio of 38x, indicating a potential upside of 36% from current levels [12]