Willfar(688100) 长城证券·2024-06-04 11:31Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company is a rising star in the power industry, focusing on IoT and smart city solutions, with a diversified competitive edge and strong brand recognition [2] - The company is well-positioned to benefit from the increasing investment in the power sector, particularly in the user-side market, driven by the construction of new power systems [3] - The company's overseas business is showing high growth potential, with significant projects in Africa, Egypt, and Bangladesh, and a global presence with over 100 million smart meters in operation [4] Financial Performance - Revenue is expected to grow from 2,225 million yuan in 2023 to 5,079 million yuan in 2026, with a CAGR of 28.6% [2] - Net profit attributable to the parent company is projected to increase from 525 million yuan in 2023 to 1,042 million yuan in 2026, with a CAGR of 25.1% [2] - ROE is expected to rise from 17.7% in 2023 to 21.0% in 2026, reflecting improved profitability [2] Industry Trends - The smart grid market in China is expanding rapidly, with a CAGR of 15.52% over the past five years, reaching 979.4 billion yuan in 2022 [3] - Investment in the power grid is increasing, with State Grid planning to invest 350 billion USD during the 14th Five-Year Plan period, and Southern Grid planning to invest 670 billion yuan [3] - The user-side market is expected to drive growth, with investments in electricity information collection systems creating opportunities for the company [3] Overseas Expansion - The company has secured significant projects in overseas markets, including a 50 million yuan contract in Bangladesh and a smart meter project in Laos [4] - The company has established five global R&D and manufacturing centers, with a total investment exceeding 10.5 million euros, indicating a strong global strategy [4] - The company's overseas business is expected to contribute significantly to future growth, with a focus on smart grid and smart city solutions [4] Business Segments - The company provides IoT solutions for smart grids, smart energy (water/gas/heat), smart streetlights, and smart security, covering the entire IoT value chain [38] - In the digital grid sector, the company focuses on key technologies for the new power system, offering solutions for power generation, transmission, distribution, and usage [40] - In the smart city sector, the company leverages IoT technology to manage energy efficiently, offering solutions for integrated energy, smart firefighting, and smart parks [40] Technological Innovation - The company holds 707 patents, including 149 invention patents, and has participated in the formulation of 65 standards, including 36 national standards [93] - The company has developed advanced communication chips and modules, such as the WTZ30 dual-mode communication chip, which is widely used in smart meters and power IoT applications [126] - The company has achieved CMMI-ML5 certification, the highest level of software maturity, demonstrating its capability to deliver high-quality software solutions globally [98] Market Position - The company has a strong market position in China, with leading market shares in State Grid and Southern Grid tenders, and a diversified customer base including major state-owned enterprises [98] - The company has a significant presence in the international market, with over 10 million user connections globally, covering Africa, Asia, and South America [133] - The company's products and solutions have gained international recognition, with certifications such as Wi-SUN FAN and Brazil Anatel, supporting its global expansion [133]