LYXQL bearing successfully mastered the key technology of soft strip-free quenching

As an expert in the field of slewing bearings, LYXQL has successfully mastered the key technology of soft-band quenching. Since its establishment, the company has been focusing on the design and manufacture of slewing bearings, and has made remarkable achievements in the localization of some products, especially in the field of high-power wind turbine bearings. The 1.5MW to 18MW variable pitch and yaw bearings and high-power wind power yaw variable pitch bearings developed by the company have successfully replaced imported products; in addition, 2-5MW three-row cylindrical roller main shaft bearings, 3-18MW single-row tapered roller bearings and 3-12MW soft-band double-row tapered roller main shaft bearings have been launched, all of which have entered the mass production stage. In particular, the successful development of the 12MW offshore typhoon-resistant main shaft bearing has solved the technical bottleneck of large domestic wind turbines and completed the installation application.

Thanks to the rapid expansion of the domestic wind power industry. According to data released by Goldwind Technology, in the first three quarters of 2024, the total domestic wind turbine tender volume reached 119.1GW, a year-on-year increase of 93%, of which land wind power was 111.5GW, an increase of 101%, and offshore wind power was 7.6GW, an increase of 25%. This shows that 2025 will be an important year for wind power equipment installation.

With new breakthroughs in main shaft bearings and gearbox bearings, LYXQL is ushering in new growth opportunities. According to the company's latest investor relations report, based on the current order situation, the delivery volume of main shaft bearings is expected to increase significantly; at the same time, the research and development of gearbox bearings is also progressing steadily, and technical exchanges with potential customers and prototype development are progressing smoothly.

Earnings forecast and investment advice: We predict that LYXQL's earnings per share in 2024 to 2026 will be 0.19 yuan, 1.26 yuan and 1.57 yuan respectively. Considering the company's technical barriers in its professional field, broad market prospects and low localization rate, as well as its potential to expand into areas other than wind power, we believe that it is reasonable to give the company a PE valuation of 20 times in 2025, corresponding to a value of approximately RMB 25.14 per share and an estimated total market value of RMB 9.017 billion, so a "buy" rating is given.

Risk warning: Risk of raw material price fluctuations, risk of new product R&D progress not meeting expectations, and risk of the wind power industry developing at a slower pace than expected.