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 and major Internet companies. The company's technical strength is robust and reliable, with annual R & D investment exceeding 10% 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, and maintaining long-term trade relations with AcuityBrands, Armenia, Honeywell International Inc and other international companies.

Seizing the growth opportunity of 5G communication power supply to surpass the all-time high in 2018, the decline in the company's performance is mainly due to a sharp drop in demand for power equipment due to the completion of the construction of the 4G network. Since 2019, under the background of severe international and domestic economic environment and accelerated technological change, the company has sought steady development, focused on technological innovation in the technological areas that the company is good at, and further expanded its existing business fields. three major industries have been formed: data communications, smart energy and new energy vehicles, which are customer demand-oriented and technological innovation-driven. The use of direct sales + agent sales to provide customers with products to the overall solution and complete lifecycle services. At present, the company's various businesses go hand in hand, the business revenue tends to be balanced, and the structure is also being optimized. Since the third quarter of this year, the company has revenue of 792 million yuan and net profit of 16.12 million yuan, completely reversing last year's loss situation, and the gross profit margin has also steadily risen to a new high in recent years, internal expenses have been reduced, and profitability has been effectively improved.

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. It is estimated that in 2020, the investment in base station equipment of telecom operators will exceed 200 billion, and the corresponding communication power demand will also reach a new high. The company is aiming 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, on the other hand, the Anhui intelligent factory production base is built, the automation of the company's production line is greatly improved, and the product manufacturing capacity is further enhanced. At the same time, the company increases the construction of supply chain platform and process platform, and further improves the response speed and product delivery ability of the supply chain by combing and optimizing the internal management process of the factory. actively build a manufacturing system and supply chain system that meets the requirements of large international companies.

Speed up the layout of the smart energy industry, and actively develop new energy vehicle industry companies with initial results in the layout of smart energy business, and successfully carried out in-depth cooperation with customers such as Petrochina, China Tower Corporation, Aerospace long March in Xiongan. Xiongan intelligent photovoltaic shed and other smart energy demonstration projects successfully landed, and achieved good social effects. At the same time, the company's traditional EPS and intelligent evacuation system products are widely used in rail transit, airports and other public infrastructure fields. The company's products are used in a number of major projects such as Daxing International Airport, Beijing Metro and Shenzhen Metro projects, resulting in steady growth in sales of traditional EPS and intelligent evacuation products. In addition, as the supplier of the China Tower Corporation energy exchange cabinet project, the company will cooperate with China Tower Corporation Energy Company to complete the "hundred cities and ten thousand stations" project, and the intelligent change cabinet will become a new profit growth point of the company's business.

In the field of new energy vehicles, the company's motor and motor controller business has formed a complete motor electronic control product system, especially in the hydrogen fuel vehicle business, the company's fuel cell DCDC converter product power reaches 60-120kW, which has covered all stack power requirements at home and abroad. On the basis of continuous cooperation with Beijing Yihuatong, Futian Automobile, Zhongzhi, Shenlong and other manufacturers, we have added Zhejiang hydrogen Road, Weichai, Edelman, Nantong Baiying and other long-term partners. At the same time, the company's new layout of add-on series of products, in order to meet the further needs of future add-on vehicles for system controllability and economy, and laid a solid foundation for the follow-up business expansion. At the same time, the company took the lead in launching a liquid-cooled charging pile system in China, and integrated a full-color touch LCD screen, which can provide users with value-added services such as advertising push. The product successfully won the bid "Hainan Boao Smart Grid Optical Storage and charging Integrated demonstration Project". It has become the first comprehensive demonstration project of smart grid in Southern Power Grid.

Profit and forecast

Considering that the communications industry is in the early stage of 5G construction, the pulling effect of the communication power business on the company is gradually emerging, at the same time, the company's smart energy business is growing steadily, and the business in the field of new energy vehicles is about to enter an explosive period. the company's performance is expected to recover and enter an upward trend, we are optimistic about the company's current transformation planning and development momentum in the next two years. It is estimated that the company's revenue in 2021 will reach 1.707 billion and 2.39 billion yuan, corresponding to a net profit of 84.79 million and 132 million yuan, giving the company an "overweight" rating.

Risk tips: 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.