LSKJ(300680) 上海证券·2024-02-21 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [32]. Core Insights - The company is positioned as a leader in the EGR (Exhaust Gas Recirculation) system market, actively expanding into the new energy vehicle and precision components sectors. The three business segments are expected to grow simultaneously, driven by policy support and increasing demand for hybrid and natural gas commercial vehicles [26][40]. Company Overview - The company has been deeply involved in the EGR system for nearly two decades and has expanded into the new energy vehicle and precision components sectors through strategic acquisitions and investments [40][59]. - The EGR system is a core component for commercial vehicles and new energy hybrid vehicles, effectively reducing fuel consumption and suppressing engine knocking [60][63]. Market Position - In the domestic diesel EGR market, the company holds a significant position, with a projected market share of 60% in the light truck sector during the National VI phase [3]. - The company has established strong customer relationships with major automotive manufacturers, including BYD, Geely, and Chery, for hybrid vehicle EGR systems [3][26]. Financial Performance - The company anticipates achieving net profits of 1.50 billion, 2.43 billion, and 3.40 billion yuan for the years 2023, 2024, and 2025, respectively, reflecting year-on-year growth rates of 99.01%, 61.58%, and 39.92% [32][27]. - The revenue from EGR products, new energy products, and precision components for 2022 was 2.85 billion, 4.15 billion, and 3.84 billion yuan, respectively, indicating a balanced revenue structure across its three business segments [46]. Production Capacity and Expansion - The company plans to expand its production capacity for motor cores to 4.32 million sets by 2025, supported by recent fundraising efforts [11][50]. - The company has successfully developed and launched multiple projects in the drive motor core sector, with significant growth in sales revenue and gross margin from 2020 to 2022 [11][12]. Regulatory Environment - The tightening of emission standards, including the implementation of National VI standards, has positioned the EGR system as a critical component for meeting regulatory requirements in both on-road and off-road vehicles [22][23]. - The company is well-positioned to benefit from these regulatory changes, as its EGR systems are essential for reducing nitrogen oxide emissions and improving fuel efficiency in commercial vehicles [23][26].