Jade Bird Fire(002960)2024-11-12 09:03Investment Rating - The report assigns a "Buy" rating for the company, marking it as the first coverage [2]. Core Views - The company is a leading player in the domestic fire alarm industry, with a comprehensive product range covering fire alarms, gas extinguishing, gas detection, emergency lighting, and industrial fire safety [2]. - The upcoming national standard replacement in May 2025 is expected to accelerate the exit of smaller players from the market, enhancing industry concentration [2]. - The company is transitioning from "incremental construction" to "stock updating," maintaining gross margins despite declining average prices [2]. - The overseas business has shown significant growth potential, with a 24.7% year-on-year increase, and the industrial fire safety segment is expanding into various industries [2]. Summary by Sections Company Overview - The company has expanded its product offerings to include a full range of fire safety management solutions, addressing both commercial and industrial sectors [12]. - The traditional commercial fire safety market is becoming saturated, while opportunities for domestic replacements in industrial fire safety are emerging due to higher technical barriers [12][14]. Revenue Breakdown - The company’s revenue from overseas markets has increased significantly, accounting for 16.5% of total revenue in the first half of 2024, with a compound annual growth rate (CAGR) of 198.7% from 2020 to 2023 [16][18]. - The industrial fire safety segment's revenue contribution has also risen to 5.7% in the first half of 2024, indicating a shift away from reliance on the real estate sector [16][21]. Investment Logic - The replacement of national standards is anticipated to lead to a consolidation in the industry, as companies must meet higher research and production requirements [23][26]. - The shift in customer focus from traditional commercial to industrial fire safety is expected to enhance direct sales capabilities [28]. - The company has maintained stable gross margins despite a decline in average prices, supported by its self-developed "Zhu Huan" chip technology [2][21]. Profit Forecast and Valuation - The company is projected to achieve revenues of 49.9 billion, 53.7 billion, and 59.7 billion yuan from 2024 to 2026, with net profits of 5.25 billion, 6.89 billion, and 8.29 billion yuan respectively [2][4]. - The target price is set at 14.80 yuan per share, based on a 16x price-to-earnings (PE) ratio for 2025 [2].