【Shanzhen Auto】Chongde Technology Dynamic Comments: Domestic Substitution of Aero-engine Bearings Accelerates Performance Release, Equity Incentives Demonstrate Strong Growth Confidence

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【Event Description】

On February 10th, the company released the “2026 Restricted Stock Incentive Plan (Draft)”. The company plans to repurchase shares to grant no more than 45 core employees a total of 426,200 restricted shares, accounting for 0.49% of the total share capital. The grant price for this incentive plan is set at 36.52 yuan per share, with vesting arrangements for 2026-2027, assessed once per fiscal year based on the average net profit or operating revenue of the company from 2023-2025. The performance target for 2026 is a net profit growth rate of no less than 30%, or an operating revenue growth rate of no less than 30% with a net profit growth rate of no less than 20%. The 2027 performance goal is a net profit growth rate of no less than 50%, or an operating revenue growth rate of no less than 50% with a net profit growth rate of no less than 35%.

【Event Commentary】

Leading domestic dynamic oil film sliding bearing manufacturer with strong performance growth. The company’s self-developed dynamic oil film sliding bearing products mainly focus on industrial drives, energy generation, petrochemical, and shipping sectors. In these industries, revenue for the first half of 2025 was 156 million, 69 million, 29 million, and 17 million yuan respectively, accounting for 55.1%, 24.3%, 10.24%, and 6.06% of total revenue. Product types include sliding bearing components, sliding bearing assemblies, and rolling bearings, with revenues of 95 million, 81 million, and 47 million yuan in the first half of 2025, representing 33.43%, 28.43%, and 16.56% of revenue structure. In Q3 2025, the company’s quarterly revenue was 162 million yuan, up 48% year-over-year; net profit attributable to the parent was 36 million yuan, up 60% year-over-year, marking a period of rapid growth.

Gas turbine bearing business achieved leapfrog growth, with high margins opening up profit space. The company’s gas turbine business, from a small base in 2024, is expected to expand significantly in scale over the coming years, becoming a new engine for performance growth. Currently, the company has successfully supplied gas turbine bearings to major domestic manufacturers such as Dongfang Electric, Shanghai Electric, and China Reignite, achieving independent design and manufacturing of gas turbine sliding bearings, and has begun cooperation with top global gas turbine manufacturers.

Nuclear power and wind power businesses operate in parallel, with diversified energy sector deployment yielding excellent results. In 2025, nuclear power revenue further surpassed, becoming the company’s second major growth driver after thermal power. The company has established a leading position in key nuclear power components through platforms like nuclear main pump bearing testing rigs in extreme environments. In wind power, the company strategically positioned itself with the “slide instead of roll” technology trend, with sliding bearings for wind gearboxes achieving large-scale replacement and sufficient orders in hand, ensuring continued growth in 2026.

Major breakthroughs in internationalization strategy, with Levicron acquisition completing the ultra-precision bearing puzzle. The company’s wholly owned subsidiary Platin 2608 GmbH plans to acquire 100% of German Levicron for 8.5 million euros, currently under government review. The European center is officially operational, staffed by industry leader Renk, whose advanced technology in air-bearing and oil-free lubrication will form strong synergy with Chonde’s existing system. Additionally, international orders have grown significantly, with successful bids on multiple global projects. In the first half of 2025, overseas revenue was 43.55 million yuan, accounting for 15.37% of total revenue, up 14.58% year-over-year, with a gross margin of 50%, 15 percentage points higher than domestic business.

The stock incentive grant price is discounted by 50%, demonstrating the company’s strong motivation. The grant price is set at 36.52 yuan per share, based on the higher of the average stock price over the previous 1 trading day and 20 trading days, discounted by 50%. This significant discount reflects the company’s commitment to incentivizing core team members and supporting long-term stable development.

【Investment Recommendations】

We forecast that from 2025 to 2027, the company will achieve revenues of 609 million, 734 million, and 853 million yuan, respectively, with year-over-year growth of 17.7%, 20.6%, and 16.2%. Net profits attributable to the parent are expected to be 131 million, 162 million, and 196 million yuan, respectively, with growth rates of 13.1%, 24.4%, and 20.8%. EPS are projected at 1.50, 1.87, and 2.26 yuan. Based on the March 12 closing price of 76.29 yuan, the corresponding forward P/E ratios are 51, 41, and 34 times. Considering the company’s domestic substitution capabilities in high-end equipment and successful expansion in high-growth sectors like gas turbines, nuclear power, and wind power, we initiate coverage with a “Buy-A” rating.

【Risk Warnings】

Macroeconomic cycle risk: The development of the bearing industry is linked to macroeconomic trends. Generally, rapid macroeconomic growth favors the development of the dynamic oil film sliding bearing segment; slowdown or decline in the macro economy can lead to slower or negative growth in this industry.

R&D and industrialization risk: The company’s R&D products are based on future industry application trends. If future technological development paths differ significantly from the company’s assumptions or if industry technology upgrades are rapid, the company may face slow or failed product development and unanticipated challenges in commercialization.

Raw material price fluctuation risk: The company’s self-produced products have a high proportion of direct material costs. Fluctuations in raw material prices could directly impact profitability. Shortages or price increases in upstream raw materials could lead to decreased gross margins.

Financial Data and Valuation

Source: Changwen, Shanxi Securities Research Institute

【Financial Forecasts and Valuation Data】

Source: Changwen, Shanxi Securities Research Institute

Analysts: Liu Bin

Registration Code: S0760524030001

Analysts: Yao Jian

Registration Code: S0760525040001

Analysts: Jia Guocheng

Registration Code: S0760525120001

Report Date: March 13, 2026

【Analyst Commitment】

I am registered as a securities analyst with the China Securities Industry Association. I pledge to produce this report with diligent professionalism, independently and objectively. I am responsible for the content and opinions in this research report, ensuring that information sources are legal and compliant, research methods are professional and cautious, and conclusions are reasonably supported. This report accurately reflects my research views. I have not received, nor will I receive, any form of compensation directly or indirectly related to specific recommendations or opinions in this report. I commit not to use my position or information obtained during my work to seek personal or others’ benefits.

【Disclaimer】

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