HANGYANG LIMITED(002430) 华安证券·2024-09-06 13:12Investment Rating - Buy rating for the first coverage [1] Core Views - The company is transitioning from equipment manufacturing to operations, leading the domestic air separation industry [1] - The company has shown resilience in adverse market conditions, with 2023 revenue reaching 13.31 billion yuan, a 4.0% YoY increase, and net profit attributable to the parent company of 1.22 billion yuan, a 0.5% YoY increase [1] - The industrial gas industry has a high ceiling, with domestic manufacturers having significant potential [1] - The company is expanding its pipeline gas business, retail gas business, and regional presence, with cumulative oxygen production capacity reaching 3.2 million Nm³/h by the end of 2023 [1] - The company is a leader in air separation equipment, with a market share of 43.21% in 2020, and is actively expanding overseas markets [1] Financial Performance - Revenue for 2023 was 13.31 billion yuan, a 4.0% YoY increase, with net profit attributable to the parent company of 1.22 billion yuan, a 0.5% YoY increase [1] - Revenue for the first half of 2024 was 6.73 billion yuan, a 4.4% YoY increase, with net profit attributable to the parent company of 437 million yuan, a 16.76% YoY decrease [1] - The company's revenue CAGR from 2010 to 2023 was 12%, and net profit CAGR was 10% [1] - Gross margin in 2023 was 22.9%, a 2.6 percentage point decrease YoY, and net profit margin was 9.6%, a 0.4 percentage point decrease YoY [1] Industry Overview - The global industrial gas market size grew from 720.2 billion yuan in 2017 to 943.2 billion yuan in 2021, with a CAGR of 7% [23] - The domestic industrial gas market size grew from 1.211 trillion yuan in 2017 to 1.798 trillion yuan in 2021, with a CAGR of 10% [23] - The domestic industrial gas market is expected to reach 2.842 trillion yuan by 2026 [1] - The outsourcing ratio of the domestic industrial gas market is expected to increase, with the retail gas business expected to grow from 59.1 billion yuan in 2021 to 103.4 billion yuan in 2026, with a CAGR of 11.9% [28] Business Expansion - The company has established eight major regions nationwide, with a focus on East China and Central China, and has expanded into South China, North China, and the Sichuan-Chongqing region [40] - The company signed a gas project in Indonesia in 2023, marking the first step in the internationalization of its gas business [1] - The company is continuously enriching its retail gas business, with the potential to bring performance elasticity when market conditions improve [1] - The company is focusing on the localization of special gases, with products including rare gases, high-purity gases, and electronic bulk gases [43] Air Separation Equipment - The company's air separation equipment market share has been increasing, with a market share of 43.21% in 2020 [1] - The company is actively expanding its overseas market, with foreign trade contract value reaching 908 million yuan in 2023, accounting for 14.03% of total equipment sales contracts [1] - The company's air separation equipment has been exported to more than 40 countries, with foreign trade orders exceeding the total for 2023 by July 2024 [1] Hydrogen Energy - The company is actively developing hydrogen energy-related businesses, including hydrogen production, purification, storage, and refueling [48] - In 2022, the company invested in a 4000 Nm³/h hydrogen purification device and a 6000 kg/d hydrogen refueling station project [48] - In 2023, the company participated in the EPC general contracting project of the largest hydrogen-electricity integrated energy island in China [48]