Counter-cycle-user-side change, distribution network boom can be expected. At present, with the rapid development of new energy vehicles and distributed energy, the distribution network industry is booming; as a counter-cyclical industry, distribution network is expected to become a starting point for steady growth when the economy is under downward pressure. At the same time, most distribution network equipment listed companies seek transformation or new business expansion outside the distribution network, and the supply and demand pattern of the distribution network equipment industry is expected to improve. It is expected that the investment demand of urban distribution network is expected to accelerate the emergence, promoting the steady growth of the overall distribution network investment scale.
Focus on the distribution network business, enter the performance release period. As a veteran distribution network equipment manufacturing enterprise, the company has strong system integration capability and independent research and development capability, and a relatively complete range of primary and secondary products; compared with its main competitors, the company is more focused on the development of the main business of distribution network, the recent rights issue fund-raising is mainly used for distribution network equipment capacity expansion. With the prosperity of the distribution network industry, the company's distribution network business revenue scale is expected to continue to grow, the cost rate also has a certain compression space, profitability is expected to improve.
Increase the speed of the incremental distribution network and open up the growth space. The promotion process of incremental distribution network is expected to speed up. The NDRC has launched three batches of 320 incremental distribution network pilot projects, and selected 12 projects as key follow-up projects. With the support of policies, incremental distribution network is expected to accelerate development in 2019. The company has actively laid out the incremental distribution network pilot projects. at present, the two projects that the NDRC has participated in have been included in the scope of the 12 incremental distribution network pilot projects focused on follow-up by the National Development and Reform Commission, and the comprehensive energy services related to the pre-reserve are also expected to benefit from the development of the incremental distribution network.
Investment suggestion: the income of the company from 2018 to 2019 is expected to be 25.4 and 2.97 billion yuan, the net profit of the parent is 1.05,141 million yuan, and the EPS is 0.21,0.28 yuan, and the corresponding stock price PE is 28.7,21.2 times. We believe that the company will obviously benefit from the upward boom in the distribution network industry and the acceleration of incremental distribution networks, covering for the first time and giving a "recommended" rating.
Risk tips: (1) the main body of distribution network investment is more concentrated, mainly for the State Grid and Southern Power Grid, the scale of distribution network investment in a certain year has the risk of fluctuation. (2) the incremental distribution network is greatly affected by the policy. at present, the promotion is intensified and accelerated, but there is still great uncertainty about the actual effect of the incremental distribution network reform. (3) the company has intensified the development of customer engineering market in recent years, but the payback situation of relevant customers may be worse than that of State Grid and Southern Power Grid, and there is a risk of expanding the scale of bad debt provision.