不锈钢泵：受益于水利基建与设备更新，有望加快替代铸铁泵位于国内不锈钢泵第一梯队，产品广泛用于管道供水、工业用水、空调系统、净水设备等。2014-2024 年收入由1.87 亿元提升至5.07 亿元，CAGR 为12%。不锈钢泵对比传统铸铁泵省电10%-20%，但成本贵20%-30%，万亿水利国债催化&设备更新政策驱动，加速不锈钢泵对铸铁泵更新替代，公司有望持续受益。A leader in the plastic bathroom pump industry, steady and far-reaching
The company is a leader in the plastic bathroom pump industry. Its products include plastic bathroom pumps, stainless steel pumps, and general pumps. Plastic bathroom pumps are exported to the US, Europe, etc., and interest rate cuts in North America are compounded to replenish stocks, and exports are expected to continue to grow. In terms of stainless steel pumps, domestic water infrastructure superposition equipment has been upgraded to drive stainless steel pumps to accelerate the replacement of cast iron pumps. The company is the first tier of domestic stainless steel pumps and is expected to benefit. We expect the company to achieve net profit of 0.444/0.508/0.584 billion yuan in 2024-2026, EPS of 1.24/1.42/1.63 yuan/share, respectively. The current stock price corresponds to PE 16.7/14.6/12.7 times, respectively. The company's 2024 valuation is lower than the average of comparable companies in the industry. Since the company is the core boom target in the export chain, the dividend rate is high, production capacity expansion is guaranteed, and coverage is given for the first time, giving it a “buy” rating.
Plastic bathroom pumps: The North American inventory replenishment and interest rate reduction cycle has begun. The company at the inflection point of exports is a plastic bathroom pump head brand. 2024H1 plastic bathroom pumps account for nearly half of the revenue, including bathtub pumps, SPA pumps, and pool pumps. They are mainly exported to North America and Europe, and direct exports account for nearly 70%. In 2021, due to the increase in shipping costs and the epidemic, overseas customers had strong demand for inventory replenishment, which led to a high increase in plastic bathroom pump revenue. After inventory consumption in 2022 to 2023, overseas inventories are currently low, and demand for inventory replenishment is strong. 2024H1 plastic bathroom pump revenue increased by 35%, returning to rapid growth. Furthermore, in September 2024, the Federal Reserve opened a channel to cut interest rates. Plastic bathroom pumps are also expected to benefit as post-real estate products, and exports are expected to reach an inflection point.
Stainless steel pumps: Benefiting from hydraulic infrastructure and equipment updates, they are expected to quickly replace cast iron pumps in the first tier of domestic stainless steel pumps. The products are widely used in pipeline water supply, industrial water, air conditioning systems, water purification equipment, etc. Revenue increased from $0.187 billion to $0.507 billion in 2014-2024, with a CAGR of 12%. Compared with traditional cast iron pumps, stainless steel pumps save 10%-20% of electricity, but they are 20%-30% more expensive. Driven by the trillion-dollar water treasury bond catalytic & equipment renewal policy, the company is expected to continue to benefit.
High dividends highlight long-term investment value. Since the production capacity plan establishes development guarantees, cash dividends have been implemented for 7 consecutive years, with a cumulative dividend of 1.9 billion yuan, a 2023 dividend of 0.36 billion yuan, a dividend payment rate of 93.2%, and a dividend rate of 5.8%. High dividends highlight long-term investment value. Furthermore, in 2021, it is planned to have a production capacity of 8 million centrifugal pumps over the next five years. The site has now been completed, which can quickly respond to market expansion needs.
Risk warning: US real estate recovery falls short of expectations; US tariff risk; domestic recovery falls short of expectations.