Ru Jing Technology is a professional provider of frequency conversion energy saving and intelligent control applications, focusing on the R & D, production and sales of integrated products in the fields of power electronics and motor control, covering HVAC, thermal management of new energy vehicles and industrial servo. The core advantage of the company lies in R & D and innovation capability and technology accumulation. Mr. Lei Huaigang, the chairman of the board, has many years of teaching and research experience in the field of power electronics, and many senior executives of the company have also established the technical genes of the company for their R & D and technical background.
HVAC field: the main growth point is heat pump, which is based on the advantages of economy + energy saving and emission reduction, and the market demand continues to grow with the support of policies. Many European countries have introduced subsidies and the elimination of traditional heating equipment, and heat pump sales have increased by 38% and 36% in the past two years compared with the same period last year. The US IRA policy also provides subsidies for heat pump installation, which is expected to stimulate market demand growth. Assuming that all heat pumps adopt frequency conversion technology, and the frequency conversion driver ASP is 700 yuan, it is estimated that the market space of European / American heat pump variable frequency driver is 3.35 billion yuan.
Relying on a sound technical system and efficient R & D capabilities, the company supplies large European heat pump brands and occupies a high share of suppliers. Since the establishment of a joint venture with Emerson in 2014, the products have successfully entered the European market and supplied European head heat pump brands, accounting for more than 50% of the suppliers.
Look at the new market (USA) + new products (refrigerated) in the future. At present, the company mainly supplies European customers and is expected to enter the American market in the future; at the same time, the company is also developing cold chain refrigerated products at the same time.
New energy vehicle thermal management: technical advantage forging product power, space comes from the improvement of new energy vehicle penetration + domestic substitution to increase market share: the company's new energy vehicle thermal management core product specifications are complete, performance (rotational speed operating range, maximum acceleration and deceleration) leading peers, electric compressor frequency conversion driver market share continues to increase, from 4.3% in 2020 to 5.8% in 2022 And in some key models to achieve domestic replacement of imports. It is estimated that the global / domestic market space of the company's electric compressor frequency conversion drives in 2030 will be 16.18 billion yuan respectively.
Benefit from the scale effect gross profit margin continues to rise, fund-raising projects to solve capacity bottlenecks. Under the scale effect, the gross profit margin of 23H1, the company's thermal management product, has increased to 24.2% (15.2% in 20 years), and we expect it to continue to rise in the future. The fund-raising project is expected to increase the annual production capacity of 1.8 million sets of thermal management products to solve the capacity bottleneck.
Industrial servo: it is expected to participate in the supply chain of humanoid robots: servo technology is the core technology of humanoid robots, and the cost of parts and components is much higher than that of traditional industrial robots. The company's core products are servo drives and motors, which will focus on the robot market segment in the future, and the company is expected to deeply participate in the humanoid robot supply chain in the future.
Profit forecast and investment advice: we expect the company's operating income from 2023 to 2025 to be 2.97403 billion yuan respectively, the net profit of returning to the parent is 3.7100.72 billion yuan respectively, and the EPS is 3.93 pound 5.4pm 7.59 yuan per share respectively. It is given 25 times PE within 24 years, and the target price is 135yuan. We are optimistic that the company will continue to build competitiveness by virtue of R & D strength and technology accumulation, continue to expand business and product boundaries, and grow together in HVAC / new energy vehicles / industrial servo sectors, giving a "buy" rating for the first time.
Risk hints: industry demand is lower than expected; market competition risk; technology iteration risk; overseas operating risk; stock price or fluctuating risk; the measurement is subjective and for reference only.