Ningbo Jingda is a domestic leader in stamping and forming processing equipment. At the end of 2022, the actual controller of the company changed to Ningbo Commerce Group under the Ningbo State-owned Assets Administration Commission. The company's overseas business has continued to expand since last year, and new products such as 46 large cylindrical battery structural parts processing equipment and multi-station spinning machines are expected to increase the company's revenue in the next few years. The company's 2022 ROE is 24%, and the current dividend rate is 3%, giving the company a “Highly Recommended” rating!

Domestic special molding machine tool leader. Ningbo Jingda started with air conditioning heat exchanger processing equipment. Before launching in 2014, it was already a leading domestic air conditioning heat exchanger processing equipment leader. After listing, the company expanded various products such as presses and automotive microchannel heat exchanger processing equipment, all of which were the first (sets) in the industry. The downstream products covered various fields such as home appliances, automobile heat exchangers, new energy lithium batteries, and semiconductor electronics. From 2009 to 2022, the CAGR of the company's revenue/net profit to mother was 15% and 11%, respectively, and has achieved steady growth in performance for 7 consecutive years.

The investment of the Ningbo State-owned Assets Administration Commission is expected to bring in new industrial resources. In September 2022, Ningbo Commerce Group strategically took a stake in Ningbo Jingda, and the actual controllers of the company changed from Zheng Liangcai and Zheng Gong's father and son to the Ningbo State-owned Assets Administration Commission. As of June 2023, Ningbo Commerce Group had total assets of 306.6 billion yuan, net assets of 124.1 billion yuan, and a management fund of more than 80 billion yuan. The Group has 11 wholly-owned subsidiaries and 19 participating companies. The investment of Tsushang Group is expected to bring more industrial collaboration resources to Ningbo Jingda.

The metal forming equipment industry and its competitive pattern: The company's main business is press equipment and heat exchanger processing equipment (high-speed fin presses are one of the core equipment). The market size of China's press industry is about 43.5 billion yuan. The company's products are high-speed precision presses, which are safer, more efficient and more accurate than ordinary presses. We estimate that in 2022, the domestic high speed precision press market will be about 11 billion yuan, and the domestic heat exchanger processing equipment market will be about 1.4 billion yuan. Ningbo Jingda has developed clear advantages in terms of product technology and brand effects.

Implement a global strategy and continue to expand overseas business. The company's products are exported to more than 60 countries and regions around the world, and has established long-term cooperative relationships with well-known overseas enterprise customers such as Eurogroup, Magna, Hitachi, and Daikin. Since 2023, the company's overseas business has continued to expand: in 2022, the company's share of overseas revenue was 28%. With 2023H1, the company's share of overseas revenue has increased to 38%. Ningbo Jingda is relying on its own technology and cost advantages to go global and compete on the same stage with well-known global special press companies such as Japan's AIDA and American OAK.

The release of new products is imminent, further opening up room for growth. The company's 46 large cylindrical structural parts processing equipment and spinning machines used in high-end passenger car wheel manufacturing are expected to gradually expand in the next few years. According to our preliminary estimates, 1 GW of 46 large cylindrical batteries requires the company's equipment worth about 20 million.

Covered for the first time, giving it a “Highly Recommended” rating. We expect the company's net profit to be 1.65, 196, and 238 million yuan in 2023/2024/2025, up 16%, 19%, and 21% year-on-year, corresponding to PE 21.1, 17.8, and 14.6 times.

Risk warning: 46. The amount of equipment released for large cylindrical structural parts falls short of expectations, the volume of spinning machine products falls short of expectations, increased tariffs, etc.