Global well-known civil water pump brand, domestic shielding pump leader. Dayuan pump Industry is a global well-known brand civil pump provider with a brand history of nearly 30 years. Its main products include civil pumps, shielded pumps (including household shielded pumps, industrial shielded pumps, etc.). The company has more than 10,000 sales and service outlets throughout the country, and exported to Southeast Asia, Europe, the Middle East, South America and other 100 + countries and regions. With the improvement of the popularity of shielded pump products, the company has gradually accumulated a number of high-quality downstream customers.

Civil water pump: the domestic market needs to be integrated urgently, and the leading enterprises are expected to benefit. The global civil pump market is relatively mature, in the stage of steady growth, the foreign high-end pump market is dominated by international well-known enterprises, while the vast majority of domestic enterprises are small and have not yet established a national sales channel network. the company focuses on the main business, product categories are more complete and continue to expand production capacity, with share improvement space and capacity.

At the same time, with the reduction of the scale of traditional individual farming and animal husbandry, leading enterprises are expected to win intensive and large-scale farm orders to accelerate industry integration.

Commercial pump: the establishment of Leike pump industry is a key breakthrough, is expected to gradually increase volume. The company cooperates with the excellent team in the industry and sets up Leike pump industry. It has many product lines, such as vertical multistage pump, vertical pipeline pump, European multistage pump, hot and cold water circulating pipeline pump, etc., and the products are sold to many countries and regions in Europe, America and Asia. In the past 22 years, the company's commercial pump income is about 20 million yuan, and 23H1 Leike pump industry has achieved business income of 7.19 million yuan. With the continuous enrichment of product gradient and the improvement of business ability, it is expected to gradually establish a comprehensive service capacity for customers and drive the volume of commercial pump products.

Household shielding pump: Wall-mounted furnace supporting domestic bibcock, energy-saving pump + heat pump injection kinetic energy. After experiencing the periodic upsurge of demand, the policy orientation of the heat pump market is still clear, followed by the continuous improvement of the recognition of the new Shanghai brand market and the landing of the European heat pump subsidy support policy represented by Germany. the company's hot water circulation shielded pump business is expected to maintain good growth. At the same time, the demand for downstream energy-saving shielding pumps is in the ascendant, leading to the continuous upgrading of the company's product structure in recent years. In addition, the company is actively engaged in new market development and is expected to seize the opportunity of supplier vacancies in the Russian market to increase the penetration of high-power products, and with the improvement of production capacity and channel matching, we expect that the new market will make an important contribution to the company's business development in the future.

Industrial pump: when the domestic replacement is carried out, the supporting business of the project will accelerate the landing. At present, most of the market share of industrial shielding pumps in China is still occupied by foreign enterprises, and the technology-leading domestic enterprises represented by Dayuan are gradually recognized by customers. At present, the company's industrial pump is in the rapid start-up stage, and 23H1 generates about 130 million yuan in income, with a year-on-year growth rate of 47% under the same caliber, which is mainly used in project matching and industrial process fields. with the acceleration of related supporting types of products, it will open up a new growth space for the development of industrial shielding pump plate.

Investment suggestion: Dayuan pump industry is the leader of domestic shielded pumps, civil pumps, household pumps, industrial pumps, liquid cooling pumps go hand in hand, complete product matrix, leading technology manufacturing, with strong horizontal business expansion ability. We are optimistic that the company's household shielded pump business is growing rapidly under the background of clear downstream policy guidance and energy saving, industrial pumps successfully expand new customers + new scenes, and commercial pumps contribute marginal increments. and on the whole, the performance side of the company is more flexible than the revenue side. It is estimated that the net profit of homing in 23-25 years will be 3.6 pound, 43.30 billion yuan, corresponding to 10.7x/8.8x/7.1x. Combined with comparable company Lingxiao pump industry, Leo shares 2024 wind consensus expectations, we see Dayuan pump industry 24-year valuation of 15x, corresponding to the target price of 39 yuan per share, the first coverage, given a "buy" rating.

Risk hint: market competition aggravates risk; raw material price fluctuation risk; management risk caused by rapid scale expansion.