Research situation:
Recently, we went to Beijing Power Source Company to conduct field research. Mr. Hu Yiyuan and other company leaders introduced to us the company's business situation and business pattern since the beginning of this year, as well as the future business development direction of the company. especially in the field of communication power supply and new energy vehicles.
Main points of investment:
The business of the power supply industry has been globalized for many years.
As an enterprise in the domestic power supply industry for more than 20 years, the company has been focusing on the development of power electronics technology and green energy-saving technology. Comprehensive coverage of communication power supply, emergency power supply, high-voltage DC, high-voltage frequency converter, energy efficiency management, photovoltaic power generation and electric vehicles and other market areas. The main customers include mainstream operators (China Railway Tower, China Mobile, China Unicom and China Telecom) and major Internet companies (BABA, Baidu, Inc., Tencent, etc.). The company's technical strength is robust and reliable, with annual R & D investment exceeding 6% of that year's revenue, and R & D centers have been set up in Beijing, Shenzhen, Xi'an, Anhui, Harbin and other places. Successively established EMI laboratory, DPA laboratory, HALT laboratory and so on, to undertake the entrusted experimental projects of many large domestic enterprises. Relying on the strong technical strength, the company's products are widely used in national key construction projects in China, including National Stadium, National Olympic Sports Center, Shanghai World Expo, urban subway and other projects. At the same time, the company is gradually becoming one of the mainstream suppliers in the international new energy market, with business radiating to dozens of countries and regions such as North America, Europe and Southeast Asia. Through in-depth cooperation with Huawei, ZTE, Aerospace Science and Technology, the special subsidiary Disaiqi is developing modular power supplies, customized power supplies and other products that are exported to the international market, and maintaining long-term trade relations with AcuityBrands, Armenia, Honeywell International Inc and other international companies. In addition, the company also has ten wholly-owned subsidiaries, such as Shenzhen Power Ju Neng and Hong Kong Power Source International, and set up subsidiaries in India to carry out localized operation according to the national strategic development plan.
Seize the opportunity of the outbreak of communication power supply to improve the intelligent level of the production base
The decline in the company's performance so far this year is mainly due to a sharp drop in demand for power equipment as a result of the completion of the 4G network. However, we are concerned that since the second half of the year, with the determination of 5G standard and the distribution of domestic 5G spectrum, the three major operators are accelerating the construction of 5G trial network to promote 5G pre-commercial use. Compared with 4G network equipment, 5G network has made great changes in architecture, integrated equipment and devices, not only the increase in the number of equipment, but also significant improvement in technical performance parameters. For example, the power consumption of 4G base station is about 800W, while the power consumption of 5G station will reach 3.6KW. It can be seen that the construction of 5G network will bring large-scale demand for communication power supply. It is estimated that the equipment investment of telecom operators will exceed 220 billion in 2019, of which power equipment accounts for about 10%. Therefore, with the full commercial use of 5G network in 2020, the development of communication power industry will reach a new high.
It is aimed at the large demand for power equipment in 5G construction, and at the same time, in order to continuously meet the diverse needs of customers in the field of power electronics, on the one hand, the company strengthens the investment in technology research and development, and the other side also makes continuous investment in product line construction. it is mainly reflected in the construction of the company's core production base-Anhui Power Source Technology Co., Ltd. The base covers an area of 320mu, radiation Yangtze River Delta, the existing production and management staff of more than 1000 people, with advanced SMT production equipment, double-wave soldering machine and anti-static facilities, high-speed Philips line body, complete production process, stable process, with large-scale production advantages. In order to build an international advanced power manufacturing base, the company continues to increase investment in the construction of the base. 27.76 million of the remaining funds from the previous raised project (Liuzhou Iron and Steel (Group) Power Plant contract Energy Management Project) will be invested in the technical transformation and expansion project of the production base. The future goal of the base is to locate the intelligent chemical plant, take the intelligence of the key manufacturing links as the core, and take the network interconnection as the support, so as to reduce the operating cost and improve the production efficiency.
Speed up the transformation of comprehensive energy-saving industry and actively develop new energy vehicle industry
In addition to power products, the company has also developed comprehensive energy-saving business. However, with the technological transformation of the major steel mills, this business market space and profits are facing shrinking, the company shrinks this product line, reduces personnel and capital investment, and invests the company's superior resources into emerging industries. In recent years, the company has seen the rapid development of the new energy vehicle industry, which has brought huge market opportunities to the auto parts market. with years of accumulation in the field of power technology, the company began to devote itself to the research and manufacture of the powertrain and motor drive system of new energy vehicles, and successfully developed the DC-DC power supply for hydrogen-powered vehicles. The motor drive system of pure electric animal flow car, as well as automotive parts such as charger and DC-DC power supply of passenger car have been successfully applied and matched. At the same time, it has core technical advantages in AC charging pile, DC charging pile, charging pile operation and management platform to achieve full-coverage electric vehicle system solutions for customers. At present, it has carried out strategic cooperation with Dongfeng Special Merchants, ENN Energy, Delixi and other large enterprises. In addition, in October, the company also established Beijing Power Source New Energy Technology Co., Ltd., a joint venture with Tianjin Cichuang Technology, to comprehensively develop the electric vehicle business market, expand intensive business market share, and expand new marketing channels, thus forming new revenue and profit growth points of the company.
Profit and forecast
Considering that the communications industry is in the transition period from 4G to 5G, the reduction in the demand for 4G network power equipment has a great impact on the company's current performance, while the 5G network construction has just started, which is limited to the company's short-term pull, but it is of great significance to the company's long-term development. In addition, the company is still in the active layout stage in the field of new energy vehicles, and the revenue brought to the company by this business is also limited, but the successful entry into this field will add new performance growth points to the company's future development. we are optimistic about the company's current transformation plan and the development space in the next three years. It is estimated that the company's revenue will reach 1.124 billion, 1.27 billion and 1.74 billion yuan in the next 20 years. The corresponding return net profit is-16.35 million, 18.34 million and 47.06 million yuan, giving the company an "overweight" rating for the first time.
Risk hint: 5G network construction is not as expected, operators'5G power procurement is not as expected, and the progress of new energy vehicle business is not as expected.