The company is an excellent supplier of smart cities and smart energy solutions. The company has been ploughing the field of power electronics for more than 20 years, and its business mainly focuses on three strategic emerging industries: big data, smart energy (including energy storage systems, microgrids, charging piles, cloud computing, inverters) and rail transit (including monitoring, communications and power supply). In the first three quarters of 2018, the company achieved operating income of 4.126 billion yuan, down 24.61% from the same period last year, and its net profit was 556 million yuan, an increase of 6.02% over the same period last year.
The company is one of the leaders in the domestic UPS industry, and modular products contribute to the substantial expansion of IDC business. The company is in a leading position in the domestic UPS industry, with a market share of about 15%. Based on a series of products supporting data center construction, such as self-produced high-end intelligent modular UPS, storage batteries, precision air conditioners, precision distribution cabinets, micro-mold square, monitoring system, etc., the company vigorously develops data center business and promotes the overall solution of data center infrastructure. The company has accumulated deep technology in the field of power quality conversion, and the PUE index of modular data center is lower than the global average. The sales revenue of the company's IDC data center business in the first half of 2018 was 1.474 billion yuan, an increase of 52.06% over the same period last year, which is an important support for the company's performance growth in 2018.
Charging pile construction releases hundreds of billions of market space, charging equipment business to meet the explosive growth. Benefiting from the rapid increase in electric vehicle penetration, we expect that the domestic market space for charging pile equipment will reach 116.5 billion yuan and 237.8 billion yuan respectively in 2020 and 2025. Easite is an important manufacturer of new energy vehicle charging equipment, and its high-power DC charging technology is the leading industry. The charging pile produced by the company has strong compatibility and can meet the charging needs of all models on the market; it has high reliability and has been successfully applied in extreme environments such as islands, severe cold, high altitude and so on.
The gradual industrialization of the energy storage system is expected to form a new growth point of performance. The company actively distributes energy storage system and microgrid technology, and has developed a full range of energy storage converter products, bi-directional DC / DC converter products, energy storage power station energy management system and other core key products, as well as energy storage power station and microgrid system solutions. Intelligent microgrid and energy storage system have been gradually industrialized, which is expected to form a new growth point of the company's performance.
Profit forecast and valuation: the company is a leading smart city and smart energy solution provider in the industry. It is announced that it intends to introduce Huafa Group, a subsidiary of Zhuhai State-owned assets Supervision and Administration Commission, to become a controlling stock. in the future, it is expected to maintain steady growth in data centers, charging equipment, energy storage and other areas. We estimate that the return net profit of the company from 2018 to 2020 is 671 million yuan, 800 million yuan and 955 million yuan respectively, the corresponding EPS is 0.29,0.34,0.41 yuan per share, and the corresponding valuation is 21 times, 18 times and 15 times respectively.
For the first time, coverage gives an "overweight" rating.
Risk tips: photovoltaic system integration business decline; charging pile business expansion is not as expected.
