Event

New scenery released the semi-annual report of 2023: in the first half of 2023, the company achieved operating income of 640 million yuan, an increase of 32.02% over the same period last year, and the net profit of shareholders belonging to listed companies was 78 million yuan, an increase of 39.32% over the same period last year.

Main points of investment

Cost control has achieved remarkable results, with a high increase in semi-annual performance.

2023Q2 achieved an operating income of 426 million yuan, an increase of 25.16% over the same period last year; a net profit of 58 million yuan, an increase of 48.11% over the same period last year; and a gross sales margin of 29.46%, a month-on-month decrease of 0.88pcts, and a net sales profit rate of 13.65%, an increase of 4.31pcts. With the high performance of the company, the 2023Q2 revenue scale increased significantly compared with Q1, and the company expense rate decreased significantly with the expansion of the scale. 2023Q2's sales expense rate, management expense rate, and R & D expense rate totaled 15.12%, and 8.37pcts was reduced on a month-on-month basis, and cost control was effective.

The company will fully benefit from the broad prospect of SVG demand.

China's power quality governance market is growing rapidly, and the market space is expected to reach 174.5 billion yuan in 2023. As an important part of the power quality management market, the industry scale of reactive power compensation equipment will maintain steady growth in the future. With the continuous maturity of high-voltage SVG technology and the reduction of product cost, the share of SVG in the reactive power compensation market will continue to increase. The future high-voltage SVG market has a good prospect. It is expected that the market size of China's high-voltage SVG industry will reach 7.549 billion yuan by 2026.

As a leader in the production of high voltage SVG, the company is expected to fully benefit from the continuous expansion of the market scale in the future.

Energy storage business is expected to continue to grow.

The company has a strong accumulation of technology on the high-voltage side, and has developed a number of high-and low-voltage energy storage system integration and PCS and other products. In the first half of the year, the revenue of the energy storage business reached 104 million yuan, an increase of 53% over the same period last year. With the further development of the energy storage market, the company's energy storage business is expected to continue to grow.

Profit forecast

We predict that the company's income from 2023 to 2025 will be 21.6,29.2 and 3.65 billion yuan respectively, and its EPS will be 1.47,1.82,2.28 yuan respectively (the previous value is 1.48,2.13 yuan in 2023-2024). The current stock price corresponding to PE will be 19.8,16.1 and 12.8 times respectively. Although the current profitability of the energy storage industry is still low, the company's energy storage growth rate is still fast. At the same time, in the long run, we are optimistic about the sustained and stable development of the company's high-voltage SVG business and maintain the "buy" investment rating.

Risk hint

Upstream raw material prices fluctuate; product research and development falls short of expectations; high-voltage SVG sales fall short of expectations; energy storage business development falls short of expectations; industry competition intensifies; systemic risks in the market.