Shanghai Electric(601727) 光大证券·2024-09-02 08:43Investment Rating - Maintains a "Buy" rating for both A and H shares, with projected net profits of 7/16/30 billion yuan for 2024-2026 [2] - Current A/H share prices correspond to a 2025 PE ratio of 35/13 times [2] Core Views - Revenue for H1 2024 was 498.69 billion yuan, a decrease of 6.05% YoY, while net profit attributable to shareholders increased by 1.93% YoY to 6.02 billion yuan [2] - Q2 2024 revenue was 292.82 billion yuan, down 7.89% YoY, but net profit surged 154.90% YoY to 5.70 billion yuan [2] - Energy equipment sector saw a 3.98% YoY revenue decline to 246.54 billion yuan, but gross margin improved by 1.9 percentage points to 20.1% due to better performance in coal-fired power equipment [2] - Nuclear power sector performed well, with 14 nuclear island main equipment orders and 12 nuclear island main equipment deliveries [2] - Industrial equipment sector revenue decreased by 3.31% YoY to 189.59 billion yuan, with a slight increase in gross margin to 17.4% [2] - Integrated services sector revenue dropped 22.44% YoY to 79.61 billion yuan, but gross margin increased by 4.0 percentage points to 16.6% due to higher-margin projects [2] - New orders in H1 2024 increased by 2.01% YoY to 836.6 billion yuan, with significant growth in wind power orders (95.13% YoY to 60.1 billion yuan) [2] - Breakthroughs in energy storage, hydrogen, and photovoltaic sectors are expected to contribute to future performance growth [2] Sector Performance - Energy equipment sector: Revenue declined by 3.98% YoY to 246.54 billion yuan, but gross margin improved to 20.1% [2] - Industrial equipment sector: Revenue decreased by 3.31% YoY to 189.59 billion yuan, with a gross margin of 17.4% [2] - Integrated services sector: Revenue dropped 22.44% YoY to 79.61 billion yuan, with a gross margin increase to 16.6% [2] New Orders - Total new orders in H1 2024 were 836.6 billion yuan, up 2.01% YoY [2] - Energy equipment new orders decreased by 2.04% YoY to 484.5 billion yuan, but wind power orders surged 95.13% YoY to 60.1 billion yuan [2] - Industrial equipment new orders increased by 5.37% YoY to 225.8 billion yuan [2] - Integrated services new orders grew by 13.58% YoY to 126.3 billion yuan [2] Future Growth Opportunities - Energy storage: The company is actively developing compressed air and vanadium redox flow energy storage technologies, with projects like the 300 MW compressed air energy storage demonstration project in Hubei [2] - Hydrogen energy: The company has secured multiple orders in the hydrogen sector, including a 5 MW photovoltaic hydrogen production station project in France [2] - Photovoltaic: The company has completed grid-connected photovoltaic projects in the UK and initiated a 300.3 kWp distributed photovoltaic project in Shanghai [2] Financial Projections - Projected net profit for 2024-2026 is 7/16/30 billion yuan [2] - Revenue growth is expected to be 2.49%, 3.18%, and 3.93% for 2024-2026, respectively [3] - Net profit growth is projected at 135.17%, 142.29%, and 86.00% for 2024-2026, respectively [3]