Steady growth in income and gradual improvement in profitability

In the first half of 2023, the company realized revenue of 510 million yuan / yoy+17.7%, and net profit of 0.73 billion yuan / yoy+58.2%,. The company realized revenue and return net profit of 8.1 and 80 million yuan respectively in 2022, and the compound growth rate from 2018 to 2022 was 22% and 41% respectively, all of which achieved relatively high-speed growth. the growth at the revenue end is mainly due to the deep cooperation between the company and leading enterprises such as Midea and Haier, so as to obtain higher customer trust with better service quality and faster response speed, so as to improve the share. The company actively expands the markets of clothes dryers, automotive air conditioning pipelines and data center temperature control to inject more momentum into revenue growth. Since 2018, the profit side of the company has grown faster than the revenue side, mainly due to the gradual emergence of economies of scale.

In terms of business, the company achieved revenue of 2.6,0.7,0.3,1.1 and 50 million yuan respectively from heat exchangers, automotive air conditioning pipelines, refrigeration unit modules, refrigeration system pipe components and other businesses in the first half of 2023, of which the year-on-year growth rate of refrigeration unit modules was as high as 171%. The refrigeration unit module is an integration of single products such as heat exchangers, throttling systems, pipelines, compressors and so on. The company is growing rapidly in the field of refrigeration unit modules, reflecting that the company's integration capability has been fully trusted by customers. as the unit value of module products is higher than that of single products, the company's income ceiling is expected to usher in a breakthrough.

The competitive advantage is significant, and the market share is expected to continue to increase.

The company's main business is refrigeration equipment related products, the main products include heat exchangers, refrigeration system pipe components, automotive air conditioning piping and refrigeration unit modules, etc., product applications include light business refrigeration equipment, household refrigeration equipment, air conditioning, clothes dryers and other fields. After more than 20 years of development, the company has formed a significant competitive advantage in technology and customers, and has developed into a leading domestic light business heat exchanger enterprise. according to the company prospectus, the market share of 2021 young fin heat exchangers is about 20%.

In terms of technology, the company has the design and development ability to lead the development of the fin heat exchanger industry, and has mastered the manufacturing technology of new environmental protection refrigerant R290 high efficiency heat exchanger, high reliability and high efficiency small tube heat exchanger, delta wing enhanced heat exchanger, heat pump dryer integrated heat exchanger core manufacturing technology, CO2 wave high efficiency heat exchanger manufacturing technology, etc. The company has more than 2000 kinds of finned heat exchangers with complete production capacity and a full range of products, which can meet the needs of most customers of light commercial refrigeration equipment. In terms of customers, the company has in-depth cooperation with Haier, Hisense, Midea, LG Electronics, Kelly, Aucma, Invik and other enterprises, and can participate in its new product development at the first time. The company's technological advantages and customer advantages form a full coordination, helping the company to maintain competitiveness in the continuous iterative process of customer products, and the market share is expected to continue to increase.

Layout data center temperature control, open the growth ceiling

According to the company's semi-annual report, the company's heat exchanger products can be used in the data center. In addition, the company has established a cooperative relationship with the data center temperature control leader Invik, reflecting that the company has officially entered the data center temperature control industry. As the hub of the digital economy, the importance of the data center is prominent. Under the background of the accelerated development of generative AI, the demand for computing power is becoming more and more exuberant, and the space of the data center is vast. If the company cuts into the data center market, it is expected to fully enjoy the development dividend of the industry, thus opening the ceiling of the company's growth.

Cold chain logistics industry is another major growth point of the company. In recent years, domestic fresh e-commerce has sprung up, and the cold chain logistics market has developed rapidly. The company raised 138 million yuan through IPO for the "cold chain logistics system environmental protection heat exchanger and intelligent module industrialization project". After the completion of the project, it will form an annual production capacity of 110000 cold chain logistics refrigeration system modules and 165000 cold chain logistics heat exchangers, with an estimated annual revenue of 450 million yuan, bringing new increments for the company.

Profit forecast

It is estimated that the net profit of 2023Universe 2024Universe in 2025 will be 1.2max 1.6 / 190 million yuan, EPS 1.55max 1.96max 2.4yuan, and the corresponding PE will be 31-25-20 times respectively. Based on the steady growth of the company's main business, the data center temperature control opened the revenue ceiling and gave a "buy" rating.

Risk hint

The demand of light business industry is lower than expected; the price of raw materials is higher than expected; capacity expansion is not as expected; data center business development is not as expected.