The industry continues to prosper, maintaining the “buy” rating
The company is a leading domestic power information security enterprise and is expected to benefit from new power system construction opportunities for a long time. We maintain our original profit forecast. The estimated net profit for 2022-2024 is 1.10, 1.54, 210 million yuan, EPS is 1.83, 2.57, and 3.50 yuan/share. The current stock price corresponds to PE 25.9, 18.5, 13.5 times, and maintains the “buy” rating.
Incident: The company released its 2022 semi-annual report. The epidemic disrupted short-term performance. The company released its 2022 mid-year report. The company achieved operating income of 84.7557 million yuan, a decrease of 17.81% over the previous year; the net profit of the mother was 85973 million yuan, a decrease of 47.98% over the previous year. Short-term fluctuations in the company's performance are mainly due to: (1) due to factors such as the epidemic, on-site product delivery and implementation of some projects were delayed, marketing was blocked, and operating income declined year-on-year; (2) the company continued to increase investment in R&D projects and personnel. R&D expenses increased 35.24% year on year, and R&D personnel increased 21.78% year on year; (3) the company implemented equity incentives resulting in stock payment fees of 5.4655 million yuan.
Power grid investment is booming, electricity informatization is booming, and the long slopes and snow are heavy
During the “14th Five-Year Plan” period, the State Grid and China Southern Power Grid increased investment in the smart grid sector. The national power grid investment is expected to be 3 trillion yuan. The State Grid plans to invest 350 billion US dollars to break through the key core technologies for building new power systems, support the intelligent and comprehensive development of informatization of power grids, and plans to basically build a smart grid by 2025. China Southern Power Grid plans to invest about 670 billion yuan to speed up the construction process of digital grids and modern power grids, focusing on strengthening the fields of intelligence, digitalization, power distribution, etc., and plans to fully complete the digital grid by 2025.
The company continues to increase research and development, and the performance is worth looking forward to
The company continues to advance research and development of core technologies such as localized platforms, edge computing, the Internet of Things, information security, etc., combines customer scenario requirements with industry technology development directions, accelerates product upgrades, iterations and new project development, carries out forward-looking technology research and development and rapidly commercialization, and continuously meets the new needs that have emerged in new business development scenarios in new industries. As the impact of the epidemic abates, the company's ongoing projects are expected to be implemented at an accelerated pace, and Dongfeng's performance in smart grid construction will continue to grow.
Risk warning: repeated risks of the epidemic; smart grid investment falls short of expectations; the company's R&D falls short of expectations.