The world's leading filter press, has been deeply involved for more than 30 years. Jingjin Equipment was founded in 1988. It is a professional complete filtration equipment manufacturer, a single champion model enterprise in the Chinese manufacturing industry, and the main drafter of the national standard for filter presses. The company's filter press production and sales volume is the highest in the world, and the domestic filter press industry's market share in 2022 is around 47%. The company's products are mainly divided into three categories: complete filter presses, accessories and supporting equipment.

It is widely used downstream and actively explores new demand points.

The company pays attention to market changes in downstream segments, actively expands the scope of application of the company's products, and expands new markets and fields. In 2023, the revenue share of the main downstream application industry of the company's filtration equipment was: 1) minerals and processing, 26.6%; 2) environmental protection, 25.8%; 3) new energy, 24.6%; 4) chemicals, 9.8%.

1) Environmental protection: “Equal emphasis on mud and water” drives investment in sludge disposal. In 2022, under the city+county scale, China invested 6.24 billion yuan in fixed assets for the construction of municipal utilities for sludge disposal, +42.9% over the same period last year. The company has rich customer cases in the oilfield mud industry, papermaking wastewater industry, and municipal sludge.

2) New energy: High market recognition, layout for lithium battery recycling. The company has established a leading edge in the lithium battery industry, established good cooperative relationships with many leading companies in the lithium battery industry chain, and accumulated rich filtration experience in the lithium battery industry. Customers include well-known lithium battery material manufacturers such as Tianqi Lithium, Ganfeng Lithium, Huayou Cobalt, Rongjie Lithium, and Zhongwei Co., Ltd., which are used in various scenarios such as front-end solid-liquid separation processes, leaching workshops, and lithium slag workshops in the spodumene treatment process.

3) Mining: Benefiting from rising global mining capital expenditure and actively going overseas. Complete filtration equipment such as filter presses is widely used in mineral washing, tailings treatment and hydrometallurgy. In 2018-2022, China's mining industry's foreign investment CAGR reached 34.4%. The company has been in the mining field for many years and has cooperated closely with leading mining companies such as Zijin Mining, China Enfi, China Nonferrous, Huayou Cobalt, and Tibet Dragon.

Replacement of supporting equipment and accessories opens up a new space. The company has strengthened the R&D and design of supporting equipment for filter presses, and launched more upstream and downstream equipment in the industrial chain. After the first and second phase of the complete filtration equipment industrialization project is completed, annual revenue of nearly 3 billion yuan can be achieved after delivery.

Investment advice: As a global leader in filter presses, the company has been deeply involved for more than 30 years. With the development of mining machinery and supporting equipment, it is expected to lead the company to a new round of growth. We expect the company's net profit to be 1.05/1.2/1.37 billion yuan in 2024-26, the corresponding EPS is 1.82/2.09/2.38 yuan, respectively, and the current stock price corresponding to 2024-26 PE is 9/8/7 times, respectively. The company has a stable position in the industry and is actively expanding product lines and downstream applications. The first coverage gives a “buy” rating.

Risk warning: risk of rising raw material prices, risk of demand for new energy sources falling short of expectations, risk of macroeconomic fluctuations.