Events:

Recently, the company announced that the company won the tender and signed the procurement contract in China Tower Corporation's 2020 50A modular power supply (ordinary + small) intensive e-commerce procurement project and 2020 wall-mounted switching power supply intensive e-commerce procurement project. The total price of the contract (including tax price) is 203 million yuan, of which 50A modular power supply (ordinary + small) (including tax price) is RMB 129 million yuan, and wall-mounted switching power supply products (including tax price) is RMB 73.72 million yuan. The contract has a positive impact on the company's revenue and net profit for the current year.

Comments:

Deeply ploughing the power electronics industry, adjusting the industrial structure to enhance competitiveness over the years, the company is committed to the R & D and application of power electronics and information technology-related products in the field of green energy and intelligent energy. Since last year, in the face of the complex domestic and foreign environment, the company has adjusted its industrial structure, focusing on power conversion and energy utilization in the three major industries of data communications, smart energy and new energy vehicles, driven by technological innovation. in the three major industries to provide customers with products to overall solutions and complete life cycle services. After a year of adjustment, the company's main business income has maintained steady growth over the past 19 years, and net profit has also maintained steady growth. At the same time, with the start of domestic 5G construction, the communication power industry began to recover, the company seized the opportunity of industry recovery, on the one hand, increase the layout of power business, actively open up domestic and foreign communication power market, power business revenue continues to grow. On the other hand, the company further implements fine management, streamlines organizational structure, taps potential and increases efficiency, and increases management and operational efficiency, so that new energy business, new energy business revenue has achieved rapid growth.

Speed up the supply of communication power products and expand the business field of data centers compared with 4G network equipment, 5G network has made a significant improvement in architecture, equipment and devices, not only the equipment power demand has increased significantly, but also the technical performance parameters have been significantly improved. And the number of wireless base stations will also increase synchronously. It is expected that the investment in base station equipment of telecom operators will exceed 200 billion this year, and the corresponding demand for communication power products will also reach a new high. Since the beginning of this year, the new infrastructure led by 5G network construction has greatly enhanced the prosperity of the industry, and the demand growth of the communications industry has also brought growth opportunities to the company's main power business. The company grasps the large demand for power equipment in the construction of 5G network, on the one hand, strengthens the investment in technology research and development, and develops 5G high power power products. The Anhui intelligent factory production base built by the other side has greatly enhanced the automation of the production line and further enhanced the product manufacturing capacity, while the company has increased the construction of supply chain platform and process platform. improve supply chain response speed and product delivery capacity, and actively build international manufacturing system and supply chain system. The 230 million yuan power contract signed with the Tower Company shows that the company's 5G data communication products have been successfully applied in the communications market, which is also a good beginning for the company to participate in the domestic 5G communication construction. In the case of underemployment in the first quarter, the company has actively resumed work since the second quarter to catch up with the progress of orders to ensure the delivery of the power equipment contract signed earlier by the end of June, so as to ensure steady growth in revenue in the first half of the year and effective recovery of profits. At the same time, the company also actively participates in the power collection bidding of other operators, and with the technical strength of the company in the industry, it is expected to gain a considerable market share in the follow-up bidding. In addition, the 5G network will improve the construction of data centers, with a compound growth rate of about 30% in the next three years, while the company's newly developed IDC DC power products have begun to supply data centers of operators and large Internet enterprises, and are expected to become a new profit growth point in the future.

Speed up the development of new energy business and form two-wheel drive effect

Since the beginning of this year, after the trough of the epidemic, the new energy vehicle industry is in a steady growth trend, especially Tesla, Inc. has brought new power and hope to the whole industry chain. The smart energy industry that the company has been laying out in previous years will reach the harvest stage. The new charging piles, photovoltaic inverters and electronic control systems of new energy vehicles that have been developed will quickly enter the market and effectively improve the company's business level after obtaining customer certification. In particular, it is pointed out that the company has a strong technical strength in the field of hydrogen energy electronic control, and the customer coverage of hydrogen fuel DC/DC power supply is 80%. At the same time, the company's new layout of add-on series products, in order to meet the further needs of future add-on vehicles for system controllability and economy, has laid a solid foundation for subsequent business expansion. In other business, the company's Xiongan intelligent photovoltaic shed and other smart energy demonstration projects successfully landed, and achieved good social effects. In addition, the company's traditional EPS and intelligent evacuation system products are widely used in rail transit, airports and other public infrastructure fields, such as Daxing International Airport, Beijing Metro, Shenzhen Metro projects and other major projects.

Profit forecast

Considering the current acceleration of 5G construction, the demand for communication power will be released quickly, and the pulling effect of the company's power business on the company's business is significantly improved. although the first quarter performance loss, but only a short-term impact, does not change the company's performance has established a reversal trend, we are optimistic about the company's current transformation plan and the development momentum in the next two years, taking into account the impact of this year's epidemic. The company is expected to have revenue of 1.3 billion yuan, 1.561 billion yuan and 1.873 billion yuan in the next three years, with a corresponding net profit of 70.24 million yuan, 112 million yuan and 157 million yuan.

Risk hint: operator collection orders are not as expected, and new energy vehicle business is not as expected.