Key points of investment:
Investment advice: Considering that wind power installations fell short of expectations in 2023, wind power tenders remain high, and downstream delivery pressure is emerging, and wind power delivery pressure is expected to increase in 2024; in addition, demand for new energy vehicles will remain high, the company's product penetration rate will increase, maintain the company's 2023-25 EPS at 0.79/1.04 /1.30 yuan, maintain the company's target price of 26.11 yuan, and increase holdings.
The company's performance was in line with expectations. The company announced that it expects to achieve annual net profit of 220 to 270 million yuan/+115.6% to 164.6% year over year in 2023. The net profit corresponding to Q4 in 2023 was between 41 million and 91 million yuan, compared to -29 million yuan for the same period in 2022, which was a year-on-year correction. The main reasons for the expected increase in the company's performance are: 1) the company's product structure improved and the share of high-margin products increased; 2) 100 million yuan in preparation for depreciation in 2022; 3) external factors such as falling raw material prices and exchange rate fluctuations contributed to profit growth.
The self-lubricating bearing automobile market is expanding rapidly, and the wind power market is expected to expand in 2024. Currently, every new energy vehicle requires 100 self-lubricating bearings and continues to grow. It is estimated that in 2023, the company's self-lubricating bearings will grow by about 30% in the field of new energy vehicles; at the same time, the application of self-lubricating technology in non-bearing fields such as air conditioning compressors and plastic structural parts is also increasing. In the wind power industry, wind power is determined by rolling trends. We estimate that the potential market space for sliding bearings in wind power gearboxes exceeds 10 billion dollars, and the market space for sliding bearings in wind power gearboxes is expected to exceed 2 billion in 2025. Currently, with strong independent innovation capabilities and market competitiveness, the company has established stable cooperative relationships with wind power customers. With the emergence of an inflection point in the wind power industry, it is expected that in 2024, the company's performance will benefit from the boom in wind power and maintain high growth.
Simultaneous development matches needs and broadens market customer channels. The company's self-lubricating bearing products have met the world's leading requirements and have the ability to simultaneously develop for domestic and foreign OEMs. We have deep cooperation with Caterpillar and Sany Group of the United States in the field of construction machinery applications; in the auto parts industry, they have been widely recognized by users around the world, and the company's products have been promoted to various models such as BMW, Volvo, Jaguar, Tesla, Audi, and Volkswagen.
Risk warning: Production and sales of new energy vehicles and installation of wind power fell short of expectations, and fund-raising progress fell short of expectations.