Events:

The company recently received the "transaction notice" for the purchase of energy storage batteries and ancillary equipment used in the energy storage project of Xu Ji Group, with a transaction price of 236 million yuan. Recently, the company's power equipment and charging pile business has also won a number of projects, and the business situation continues to improve.

The energy storage business is developing rapidly, and the market in new areas is opening up smoothly.

The company's energy storage business is developing rapidly. In June, a joint venture company was set up with Sanfeng Environment and Haichen Energy Storage of Chongqing Water Holdings to engage in industrial and commercial energy storage business on the user side, which is expected to vigorously develop the southwest market. In July, the company's first batch of Zhejiang industrial and commercial energy storage projects have been completed and put into operation. This transaction project is the company's first case in the field of energy storage in the supercomputing center, which shows the strong market development ability of the company in different application fields downstream, as well as the high recognition of all kinds of customers for the quality of the company's products.

Overseas projects are carried out in an orderly manner, and the government attaches great importance to it.

On July 14, the Deputy Secretary-General of Jilin Provincial Government met with honorary representatives of the Russian Federation Chamber of Commerce and Industry (CCI) in Changchun, and the Russian representatives expressed their confidence in the cooperation of the "Life supply Line" project. The company has started to build a new energy recharging equipment production line dedicated to the "life supply line" project, and has set up the Middle East New Energy Division and the Middle East Project Technology Department at the group level to provide products and services efficiently. Recently, the relevant leaders and technical team of the company visited Russia and began to dock with the Russian project side. The orderly progress of the project is expected to fully open up the long-term growth space of the company.

With the rapid growth of on-hand orders, a number of businesses go hand in hand.

According to our incomplete statistics, all kinds of projects announced by the company since December 2022 have won a total of 1.693 billion yuan, involving charging piles, energy storage equipment, distributed optical storage EPC, wind power EPC, switchgear, ring network cabinets, intelligent meters and other power equipment. The company's traditional power equipment business is expected to benefit from the steady growth of power grid investment, and the deep technical reserve of the charging and replacement business is expected to benefit from policy support for continuous volume. Energy storage business is expected to benefit from the rapid growth of technology, channels, sales models and other advantages.

Earnings forecast, valuation and rating

We estimate that the revenue of the company from 2023 to 2025 will be 25.22 billion yuan respectively, the year-on-year growth rate will be 116.27%, 66.25%, 35.95%, 1.68, 287, 455 million, respectively, and the year-on-year growth rate will be 247.75, 71.35, 58.32% and 111.3%, respectively, and the three-year CAGR will be 0.200.35, 0.55 per share. The corresponding PE was as much as in 34-20-13. In view of the vast room for long-term growth of the company's overseas projects, project promotion and smooth market development, with reference to the comparable company's valuation, we give the company 24 times PE in 2024, raising the target price to 8.4 yuan and maintaining the "buy" rating.

Risk hints: the actual implementation of the intention agreement is not as expected; capacity investment is not as expected; overseas policy risks; increased competition in the industry; large fluctuations in raw material prices.