Event: On April 27, 2023, the company released its 2022 annual report and 2023 quarterly report. Revenue for the full year of '22 was 606 million yuan, an increase of 13.99% over the previous year; net profit of the mother was 79 million yuan, an increase of 14.02% over the previous year; and realized net profit of 72 million yuan after deducting non-net profit, an increase of 19.66% over the previous year. 23Q1 achieved revenue of 86 million yuan, an increase of 20.79% over the previous year; the net profit returned to the mother was 190 million yuan, an increase of 306.21% over the previous year; and realized the deduction of non-net profit of 0.08 million yuan, an increase of 358.63% over the previous year.
Business segments: 1) Lightning arresters: achieved revenue of 219 million yuan in '22, a year-on-year decrease of 7.67%, mainly due to changes in equipment investment plans of the company's main customer, National Grid, in '22; 2) Distribution network products: achieved revenue of 248 million yuan in '22, down 11.91% from the previous year. The decline was mainly due to the company's product structure adjustment in '22 to reduce the proportion of off-system switchbox products with low unit value among distribution network products; 3) Charging piles: achieved revenue of 61 million yuan in '22, an increase of 531.39% over the previous year, mainly due to new energy sources in the county area in '22 Market orders for charging infrastructure projects have soared; 4) Energy storage equipment: In '22, the company provided relevant energy storage equipment for incremental power distribution business pilot projects and industrial and commercial energy storage projects in the industrial agglomeration area of Neixiang County, ultimately achieving sales revenue of 74 million yuan.
Lightning arresters lead the way, and the acceleration of UHV construction is expected to contribute to growth momentum.
The company's lightning arrester bid situation continued to improve in '22, winning bids continuously in tenders and purchases on the State Grid, Southern Network, and Provincial Grid markets. In addition, the company's high-end lightning arrester products with parallel gap high-capacity low residual voltage arresters and lightning strike flash voltage limiters were also successfully sold on the State Grid and South Grid respectively, further increasing its market share. In terms of UHV lightning arresters, the company successfully won the largest bid for two key AC UHV projects in Fuzhou-Xiamen and Zhangbei-Shengli AC in '22, with a total bid amount of 29.17 million yuan. In the future, as the construction progress of UHV lines accelerates, the company is expected to achieve growth in related business as a leading UHV lightning arrester company.
Focus on the charging pile market in the county area and focus on industrial and commercial energy storage.
The company continues to enrich its product system and actively explore the market in the field of new energy. Charging piles: The AC/DC charging piles and DC fast charging stacks independently developed by the company have been mass-produced, covering a wide range of power. The company's subsidiary, Jinguan Intelligence, and related parties formed a consortium to win bids for charging post EPC projects in Tongbai County, Fangcheng County, Neixiang County, Tanghe County, etc. The contract amount for charging piles and supporting box conversion equipment reached about 185 million yuan. Energy storage:
The company has a complete business layout and rich product application scenarios. In '22, the company's electrochemical energy storage equipment and system products were used in Neixiang County incremental power distribution business pilot projects and industrial and commercial energy storage projects. In the future, the company will continue to expand incremental distribution grid projects and industrial and commercial energy storage projects.
Investment proposal: The company is the core supplier of UHV lightning arresters. Benefiting from the acceleration of UHV approval approvals and the rapid advancement of the new energy business, we expect the company's 2023-2025 revenue to be 9.19, 12.68, and 1,723 billion yuan respectively. The corresponding growth rates are 51.6%, 37.9%, and 36% respectively; the net profit of Guimu is 1.44, 2.14, and 305 million yuan respectively. Based on the closing price on April 28, corresponding to PE 2023-2025 17X, 11X, 8X Maintain a “Recommended” rating.
Risk warning: risk of rising upstream raw material prices; risk of supply chain shortages; risk of changes in industry policies.