XJEC(000400) 国盛证券·2024-04-02 16:00Investment Rating - The report assigns a "Buy" rating to the company, with a projected PE valuation of 27.2x, 22.3x, and 15.8x for 2023, 2024, and 2025 respectively [2] Core Views - The company is a leading player in primary and secondary power equipment, with significant growth potential in the DC transmission system due to the ongoing construction of ultra-high voltage (UHV) projects and the adoption of flexible DC technology [1] - The DC transmission system, particularly the converter valve segment, is expected to be a major driver of revenue and profit growth, with flexible DC technology penetration expected to surge from 0 to 1 [1][2] - The company is a core supplier of converter valves for State Grid and China Southern Grid, with a stable market share, and is poised to benefit from the UHV construction boom [1] - The company's smart power distribution system and medium-voltage power supply equipment are also expected to see strong demand growth, driven by the increasing investment in grid infrastructure and the trend towards intelligent and flexible power distribution [1] Financial Performance - The company's revenue is projected to grow from 170.76 billion yuan in 2023 to 223.51 billion yuan in 2025, with a CAGR of 14% [2] - Net profit attributable to shareholders is expected to increase from 906 million yuan in 2023 to 1.56 billion yuan in 2025, with a CAGR of 19% [2] - EPS is forecasted to rise from 0.89 yuan/share in 2023 to 1.53 yuan/share in 2025 [2] Industry and Market Trends - The UHV construction cycle is entering a new phase, with 4 UHV DC projects approved in 2023 and another 4 expected in 2024, creating a long-term growth opportunity for the company [1] - The adoption of flexible DC technology in UHV projects and offshore wind power is expected to drive significant demand for converter valves, with the company well-positioned to benefit from this trend [1][2] - The company's smart meter business is also expected to grow, driven by both domestic and international demand, with the company accelerating its overseas expansion [1] Business Segments - The company's business is divided into six major categories: smart power distribution systems, DC transmission systems, medium-voltage power supply equipment, smart meters, EV charging and swapping systems, and EMS processing services [1] - The smart power distribution system is the largest revenue contributor, while the DC transmission system has the highest profit elasticity and is expected to be the main driver of future revenue and profit growth [1] - The company is also expanding its presence in the EV charging and hydrogen storage markets, with a focus on heavy-duty truck charging and hydrogen storage solutions [2]