It is a leading industrial and commercial refrigeration company, and three state-owned enterprise shareholding reforms have boosted operational vitality. Ice Wheel Environment has become a diversified and international comprehensive equipment industry enterprise. Its main business covers the three major sectors of commercial refrigeration, central air conditioning, and energy-saving heating. The company experienced 3 state-owned enterprise share reforms in 1989, 2007 and 2019. In 2019, the company further clarified its shares at the shareholder level. Shareholder Ice Wheel Investment is a shareholding platform for Ice Wheel Group employees to hold shares in the ice wheel environment. A clearer and simplified shareholding structure is conducive to more intuitively binding the interests of employees and listed companies. In July 2023, the company announced the 2023 Restricted Stock Incentive Plan, which covered a total of 642 company executives, management executives and core technology (business personnel).

Steadily grasp industrial and commercial refrigeration chassis, and actively explore new business points. As a leading enterprise in China's commercial refrigeration industry, we believe that the support points for its long-term development can be mainly divided into industry beta and the company's own alpha. Both the industrial and commercial refrigeration sectors are experiencing both demand and policy impetus. Judging from the company's own advantages, the ice wheel product matrix is rich, and can provide various types of products and complete solutions such as low temperature refrigeration, central air conditioning, environmentally friendly heating, energy and chemical equipment, precision casting; the company has rich technical reserves and actively develops technical applications of environmentally friendly materials such as NH3, CO2, HC, He, and H2O; from the perspective of project resources, Lushang Ice Wheel Construction Design Co., Ltd., a holding subsidiary of Ice Wheel, is one of the largest design consulting companies in the field of commercial design in China. Using the Lushang Ice Wheel platform, Ice Wheel may be able to learn more about industry project trends. It is beneficial to the company's business development and the discovery of new projects. It also helps the company to better understand customer needs and forwardly iterate the company's products and solutions.

Expand the central air and heat exchange business, and lay out hydrogen energy to create a high growth point. In addition to the traditional industrial and commercial refrigeration business, the ice roller has separately arranged central air conditioning and industrial heat transfer services through Dunham Bush and Huayuan Thai Union, further broadening the company's business coverage. Dunham Bush is one of the five major European and American brands of central air conditioning. It has a solid global sales and after-sales service system, and can form a synergy with the ice wheel industrial and commercial refrigeration business going overseas. In the context of the dual carbon policy, the country's emphasis on waste heat resources such as waste gas, wastewater, and waste residue is also constantly increasing. In 2022, Huayuan Taimeng achieved operating income of 625 million yuan, an increase of 13.5% over the previous year, and business losses continued to narrow. We expect the heat exchange business to contribute more to the company in terms of revenue and profit in the future.

In addition, the company also leverages the compressor technology advantages accumulated in the refrigeration business to actively expand businesses in the fields of hydrogen energy, CCUS, and natural gas compression equipment. Shandong Binglun Haizhuo Hydrogen Energy Technology Research Institute Co., Ltd., a wholly-owned subsidiary of the company, is committed to industrial technological breakthroughs and key equipment development. By the end of '22, the design and trial production of 22 MPa and 90 MPa diaphragm compressors had been completed, and the hydrogen compressor model spectrum will be further improved in the future.

Profit forecast and investment rating: In summary, we expect the company to achieve operating income of 77.31/89.29/10.297 billion yuan in 23-25, up 26.7%/15.5%/15.3% year on year, respectively; net profit to mother is estimated to be 636/7.85/942 million yuan, up 49.3%/23.4%/20.1% year on year, respectively. First coverage, giving a “buy” rating.

Risk factors: The winning bid for the company's engineering projects fell short of expectations; the promotion of high-standard projects fell short of expectations; the promotion of cold chain logistics policies fell short of expectations; large fluctuations in raw material costs, etc.