Key points of investment

Domestic power transmission leaders are comparable in competitiveness to leading overseas companies. The company's main business is to provide powder and granular material handling system solutions with pneumatic conveying as the core. The founding team has been deeply involved in the field of pneumatic conveying for more than 20 years, breaking through several key technologies, and completing the nationwide production of core components. The technology has accumulated deep, and the reputation is constantly improving, and the core product strength is not inferior to overseas giants.

The market space for synthetic resin pneumatic conveying systems doubled in 23-27, and is expected to reach 20 billion yuan. 1. The construction of resin production capacity in the domestic market is accelerating, feeding back a sharp increase in demand for supporting systems: China, as the largest producer and consumer of synthetic resins, has had a supply gap for a long time, and domestic and foreign petrochemical giants have come to China to build new plants to increase production capacity. According to the China Petroleum and Chemical Industry Federation's forecast, the production capacity of newly built synthetic resins in 23-27 will more than double the previous five years, and the corresponding pneumatic conveying value of synthetic resins exceeds 20 billion yuan. 2. Domestic substitution, superposition, upgrade and acceleration launch: Bolong Technology has completed the national replacement of core components 3. The acquisition of GSBI is fully prepared to go overseas:

The acquisition of GSBI, the predecessor of Italy's Gwani, paved the way for future overseas business. According to Research and Markets, the scale of the global energy transportation industry reached 40.5 billion US dollars in 22-27, with a compound growth rate of 5.8%, and broad market space.

The company has the largest domestic market share, and the company received more than 2.6 billion new orders within 23 years. Driven by both product strength and cost performance, the company has continuously been recognized by customers. In the future, the company has the potential to go overseas, and has strong order flexibility and product strength.

Investment advice. Based on the company's own business order volume, capacity utilization rate, industry development trend, policy support, domestic alternative space, and future overseas potential, the company's industry and the company's own business are showing a strong growth trend. We predict that Bolong Technology's revenue for 24-26 will be 1.301/1.41/1.551 billion yuan, respectively, and the corresponding net profit will be 0.299/0.342/0.362 billion yuan, corresponding to EPS 4.48/5.12/5.43 yuan. The first coverage gives an “gain” rating.

Risk warning: Production capacity construction falls short of expectations, downstream demand is weak, and raw material prices fluctuate sharply.