The leading domestic engine lubrication and cooling pump company that actively promotes the transformation to new energy is one of the leading enterprises in the domestic engine lubrication and cooling pump field. It has leading domestic and international advanced core technologies such as electronic oil pumps, electronic water pumps, and variable displacement pumps to cover the entire automotive pump industry chain. According to data disclosed in the company's 23-year performance report, the company achieved operating income of 19409.09 million yuan in 2023, an increase of 19.48% over the previous year; net profit attributable to shareholders of listed companies was 225.7452 million yuan, an increase of 33.11% over the previous year. The company has continued to increase investment in R&D for the past six years, actively expanding the new energy market, and the new energy business has grown significantly.
The variable displacement pump business continues to grow, and the partnership with the hybrid leader BYD stabilizes variable displacement pump technology, which has outstanding energy saving advantages, can greatly improve engine working efficiency, and is one of the core components of hybrid vehicle power systems. The company's variable displacement pump technology has reached the leading domestic and international level. It has entered many customers at home and abroad, cooperated with BYD, a leader in the hybrid field, and is expected to continue to increase sales of variable displacement pump products. With DM-i super hybrid technology, BYD has achieved cumulative sales of more than 3.2 million new energy vehicles in 2023, ranking first in global NEV sales. I am optimistic about the value-added space of variable displacement pump technology in the hybrid blue ocean, and it is expected to enable the company to grow in the long term in the future.
Demand for electronic oil pumps is growing rapidly, driving the company's long-term development of electric drives. In the context of the “three in one” electric drive, electronic oil pumps have gradually become the mainstream thermal management choice for the pure electric vehicle industry with their advantages of high energy efficiency, integration, and high cost performance. Electronic oil pump products developed by the company, such as motor pre-supply pumps and reducer electronic pumps, have been mass-produced, and have received well-known domestic customers such as Changan Avita series, Dongfeng, FAW, and SAIC. The company's electronic oil pump products have advantages such as self-manufacturing of key components, dual-function integration of cooling-lubrication, and high efficiency, and the launch of a production expansion project to seize market share. Under the three-in-one electric drive, demand for electronic oil pumps is expected to continue to rise in the future, which will become a new growth point for the company's performance.
Profit forecast and investment advice: Under the dual logic of the company's rapid business expansion in the new energy field+valuation switching from lower traditional fuel vehicles to a stronger new energy sector, it is expected that Davis will double hit. The company's cooperation with leading car companies such as BYD is also expected to open up hybrid market space for the company, and binding with pure electric vehicle brands such as Avita will further open up a new growth curve for the company's electronic pump business. We forecast that in 23/24/25, the company's net profit will be 226/2.57/310 million yuan, respectively. We will give Xiangyou Pump 23X PE in 2024 with a target price of 28.52 yuan, maintaining a “buy” rating.
Risk warning: The progress of technology application falls short of expectations; market competition intensifies; the recovery of the NEV industry falls short of expectations; the risk of price fluctuations in raw and auxiliary materials; the construction of convertible debt raising projects falls short of expectations; the 23-year performance report is a preliminary estimate. The detailed financial data is based on the company's disclosure of the annual report.