ShaanGu(601369) 国金证券·2025-02-26 10:26Investment Rating - The report gives a "Buy" rating for the company with a target price of 10.19 RMB based on a 16x PE valuation for 2025 [3]. Core Viewpoints - The company is a leading player in the domestic turbine compressor market and is expanding its gas business to reduce reliance on the metallurgical sector [1][18]. - The gas segment has shown a compound annual growth rate (CAGR) of 20.3% from 2019 to 2023, increasing its revenue contribution from 23% to 34% [1][28]. - The company has a strong asset structure with robust cash flow, allowing for sustained high dividends, with a proposed dividend yield of 4.8% for 2023 [1][44]. Summary by Sections Company Overview - The company is a leading manufacturer of turbine compressors in China, with a dominant position in the axial compressor market [18]. - It has a high technical barrier and significant market share, particularly in high-end turbine compressors used in large process industries [1][16]. Business Structure - The company is actively developing its gas operations, which have become a significant revenue stabilizer, with a CAGR of 20.3% from 2019 to 2023 [1][28]. - The gas business is expected to continue growing, supported by a strong pipeline of projects and contracts [2][28]. Financial Health - The company maintains a solid asset structure with a net cash position of 7.53 billion RMB, representing about one-third of total assets [1][40]. - It has demonstrated strong cash flow management, with a cash cycle of -101 days, indicating effective working capital management [1][43]. Gas Business Expansion - The company has a substantial backlog of gas supply contracts, with a total supply capacity of 1.43 million cubic meters, three times that of 2017 [2][53]. - The gas business is expected to benefit from the increasing trend of outsourcing gas supply, which is projected to rise from 57% to 80% in line with developed countries [2][50]. Energy Storage Projects - The company is positioned to capitalize on the growing demand for compressed air energy storage, which is nearing a commercial tipping point with a signed capacity of 6.8 GW for 2024 [2][4]. - The company has already secured contracts for large-scale compressed air energy storage projects, enhancing its revenue potential in this area [2][37].