Investment Rating - The report assigns a "Buy" investment rating for the company, marking its first coverage [3][7]. Core Insights - The company is a leading player in the automotive thermal management sector, showing steady growth in performance. It has been established for over 70 years and has maintained strong development momentum in both traditional and new energy sectors. Revenue is projected to grow from 2.665 billion yuan in 2020 to 4.723 billion yuan in 2024, with a CAGR of 15.38%. Correspondingly, net profit is expected to rise from 124 million yuan to 330 million yuan, with a CAGR of 27.61% [3][4]. - The penetration rate of new energy vehicles is increasing, with sales reaching 6.937 million units in the first half of 2025, a year-on-year growth of 40.3%. The company aims to upgrade to a provider of integrated thermal management modules and system solutions, leveraging its new production base in Thailand, which has a designed capacity of 1.5 million turbo shells and 1 million mechanical water pumps annually [4][5]. - The company is expanding its thermal management technology into various civilian sectors, including data center liquid cooling and robotics. It has established partnerships with over 40 leading companies in the industry, indicating a strong market presence and potential for growth in these new areas [5][6]. Financial Projections - The company forecasts net profits of 418 million yuan, 485 million yuan, and 565 million yuan for the years 2025, 2026, and 2027, respectively. The corresponding EPS is projected to be 0.73 yuan, 0.84 yuan, and 0.98 yuan, with current PE ratios of 43, 37, and 32 times [7][9]. - Revenue is expected to grow from 4.723 billion yuan in 2024 to 6.051 billion yuan in 2027, with growth rates of 15.3%, 3.4%, 10.6%, and 12.0% for the respective years [9][10]. - The company's return on equity (ROE) is projected to increase from 9.9% in 2024 to 13.4% in 2027, reflecting improved profitability [10].

Company Overview - Feilong Automotive Components Co., Ltd. is a leading enterprise in the automotive thermal management sector in China, established in 2001, with strong growth in both traditional and new energy sectors [1] - The company focuses on a dual-line penetration strategy in "automotive + general industry," targeting non-automotive fields such as 5G base stations, AI computing centers, new energy storage, hydrogen equipment, and high-end agricultural machinery [1] Client Base - The company has over 200 domestic and international clients, with more than 130 clients in the new energy sector, serving over 300 global factory bases [2] - Major domestic clients include Chery, Seres, Great Wall Motors, and Geely, while international clients include BorgWarner, Cummins, and Daimler [2] Financial Performance - From 2007 to 2024, the company's total revenue compound annual growth rate (CAGR) is 13.7%, with projected revenue of 4.723 billion yuan in 2024, a year-on-year increase of 15.34% [3] - Revenue from engine thermal management components is expected to grow by 19.4%, while new energy-related components are projected to grow by 40.44%, becoming the main growth driver [3] - In Q1 2025, revenue decreased by 10.55% to 1.11 billion yuan, but net profit increased by 3.06% to 123 million yuan, with a gross margin improvement of 4.84 percentage points to 25.33% [3] Traditional Business Stability - The traditional business, particularly the turbocharger shell, benefits from the increasing penetration of hybrid models and export growth, with 2024 sales expected to exceed 5 million units, a year-on-year increase of 27.64% [4] - The turbocharger shell currently accounts for over 45% of the company's revenue, with a market share of 20% and an existing casting capacity of 8 million units [4] - The mechanical water pump, a core product, holds a market share of 25% and has been recognized as a manufacturing champion product since 2020 [4] New Energy and Non-Automotive Expansion - Revenue from new energy and non-automotive sectors is projected to reach 526 million yuan in 2024, a year-on-year increase of 40.44% [5] - The company's electronic water pump, with a power range of 13W-3500W, has a production capacity of 5.6 million units and is expected to capture over 10% market share in 2024 [5] - A recent order with BYD for 500,000 electronic oil pumps is expected to contribute 160 million yuan in sales revenue over its lifecycle, enhancing future revenue growth [5] Capacity Expansion and International Operations - The company is expanding its production capacity in the new energy thermal management sector, with the second phase of its Zhengzhou and Wuhu factories set to achieve large-scale production [6] - The expected annual production capacity for new energy thermal management components could reach 8 million units, sufficient to meet the needs of approximately 1.2 million new energy vehicles [6] - The Thai subsidiary, Longtai Automotive Components (Thailand) Co., Ltd., is under construction with an investment of about 500 million yuan, expected to start trial production by mid-2025 and achieve full production by the end of 2025 [6] Investment Outlook - The company's dual-line strategy is anticipated to continue releasing performance elasticity with the increasing penetration of new energy vehicles and the growing demand for liquid-cooled servers [7] - Earnings per share are projected to be 0.75, 0.98, and 1.11 yuan for 2025, 2026, and 2027 respectively, with a target price of 16.6 yuan based on a 21 times price-to-earnings ratio for 2025 [7]

Group 1: Company Overview - Feilong Automotive Parts Co., Ltd. has over 70 years of development history, established in 1952, focusing on thermal management system solutions [2] - The company has two main development phases: prior to 2017 focused on automotive thermal management components, and from 2017 onwards, expanding into non-automotive markets [2] - The company has established four R&D centers in Shanghai, Wuhu, Neixiang, and Xixia, with a focus on new energy thermal management components [2] Group 2: Production Capacity and Facilities - Wuhu Feilong, established in March 2003, occupies 100 acres with a registered capital of 100 million RMB and a total investment of 800 million RMB [2] - The production capacity includes 2 million mechanical water pumps, 7.5 million electronic water pumps, and 1.4 million electronic oil pumps annually [2] - The company plans to launch its Thailand factory by the end of June 2025, with an expected production capacity of 1.5 million turbo shells, 1 million exhaust manifolds, 500,000 mechanical water pumps, and 1 million electronic water pumps per year [6] Group 3: Product Development and Market Expansion - The company’s new energy thermal management products include electronic water pumps and thermal management systems [5] - Over 100 projects are currently underway in the civil sector, covering applications such as server liquid cooling, energy storage, and robotics [6] - The company has established relationships with over 50 clients in the civil sector, with more than 70 projects in progress, some already in mass production [4] Group 4: Future Development Plans - The company aims to consolidate its market share in traditional thermal management while increasing R&D and production of new energy thermal management components [7] - Plans to expand into new civil sector products, clients, and markets, leveraging overseas production bases for international market penetration [7] - The company is focused on enhancing product efficiency and market competitiveness in the server liquid cooling sector [6]