The company is a leading provider and operator of digital energy, communication technology services and intelligent IoT application solutions in China. Subsidiaries have excellent competitiveness, and the introduction of state-owned capital is expected to further optimize the governance structure. The company is rooted in the two basic fields of electric power and communications, and forms the planning, design, R & D and integration capability to serve the digital transformation of national basic industries. At present, it includes three main services: integrated energy service, communication design business and Wisdom application business, covering virtual power plant, integrated energy transformation, smart energy, wireless design and other fields. The company has a number of holding companies, such as Liaoning posts and Telecommunications, Beijing Hengtai Nenglian, Beijing carefree prospects, etc., among which Liaoning posts and Telecommunications is the first Class A survey and design unit in the national communications industry with rich project experience. In addition, in May 2022, the company announced the introduction of Shen Zhicheng as the company's shareholder, which is expected to integrate the advantageous resources of all parties and further optimize the company's shareholder structure and governance structure.

The east wind of power reform has arrived, and the blue sea of virtual power plant development will become. In recent years, the National Development and Reform Commission and the National Energy Administration have issued a series of documents to support the development of virtual power plants. At the end of 2022, the Technical Specification for Resource allocation and Evaluation of Virtual Power plants, presided over by the Shanghai Institute of Economic Research, has been formally approved by the National Standardization Management Committee, marking the first formal establishment of national standards in the field of virtual power plants. In September 2023, the National Development and Reform Commission and the Energy Administration issued the basic rules of the Electric Power spot Market (for trial implementation), bringing new entities such as energy storage and virtual power plants into the market transaction. At the provincial and municipal level, Shanxi, Shanghai, Guangzhou and other places have introduced special virtual power plant policies, virtual power plant is expected to usher in a period of rapid development. In terms of market scale, according to our calculations, only considering the demand-side response of virtual power plant operators and the trading business of electric energy market, the market size of virtual power plant in 2030 is estimated to be 497.73 billion yuan respectively. At present, the development of virtual power plant in China is still in the initial stage, and the industry concentration is low. We think that operators with excellent load gathering ability and data monitoring ability are expected to take advantage of the rapid development of the industry.

The company's in-depth layout of virtual power plant business is expected to create a second growth curve. In the field of virtual power plants, the company's main roles are energy aggregators, platform and technology providers and operators, participating in the virtual power plant industry chain as project implementers (for grid customers) and energy aggregators (for resource customers). The company has three core technologies in the virtual power plant: the first is the load regulation potential identification and evaluation technology; the second is the source network load storage optimization control technology; the third is the comprehensive energy operation technology based on VPP. As early as 2019, the company participated in the construction of China's first market-oriented virtual power plant demonstration project-State Grid Hebei Electric Power Company, and has accumulated rich experience in market rule formulation, user agreement signing, VPP intelligent terminal installation and commissioning, and market-oriented operation. In addition, the company participated in the construction of the intelligent energy integrated service platform of Hunan Electric Power Co., Ltd., the northeast power grid and other projects, and carried out the business of virtual power plants in Shenzhen, northern Hebei, Hunan and other places as an energy aggregator, accumulated valuable experience, had the first-mover advantage, and is expected to develop rapidly in the period of explosive market demand.

Electric power information + communication business is basically sound, supporting the company's long-term development. (1) in terms of power informatization, the company takes the monitoring and intelligent operation of the industrial Internet of things as the means, through the integrated energy management and control platform and energy optimal dispatching and trading platform to form a new energy system ecology linking energy consumption users, power grid companies, thermal companies, energy supply enterprises and other links. After more than 20 years of accumulation, the company's product technology basically covers all the technologies needed for integrated energy services, and downstream customers are widely distributed. According to the data of iResearch Consulting Research Institute, from 2018 to 2021, the scale of China's electric power digital market was 315, 345, and 369, respectively. According to the calculation, the market share of the company was 1.20%, 1.22%, 1.41, and 0.65% respectively. From 2018 to 2020, the company's operating income in the power industry increased from 378 million yuan to 522 million yuan, CAGR17.51%. It declined in 2021 due to multiple factors, and increased by 9.67% in 2022 compared with the same period last year, returning to the growth track; (2) Communications business: the company acquired Liaoning posts and telecommunications in 2018. Liaoning posts and telecommunications has a leading position in terms of project qualifications and experience, and forms obvious synergy with the company's original power business. The income ranks among the top five among the nearly 300 consulting and design units in the communication industry, the first among the private design and consulting enterprises in the communication industry, and the development of the electric power market ranks first among the design and consulting enterprises in the national communication industry. system integration market development ranks in the top five. From 2018 to 2022, the company's operating income in the communications industry increased from 439 million yuan to 635 million yuan, and CAGR9.71%, continued to grow.

Investment suggestions: we select Lang Xin Technology (mainly engaged in energy digitization, energy Internet and Internet TV), National Energy Rixin (mainly engaged in new energy power forecasting and grid-connected intelligent control systems and other products), and Jinzhi Technology (the main business of smart energy covers power generation, transmission, transformation, distribution and use of all aspects of equipment and systems) as comparable companies. As the leading intelligent big data integrated solution provider and operator in China, the company has a first-mover advantage in the field of virtual power plant. Under the background of new power system construction, virtual power plant is expected to usher in rapid development. We estimate that the company's sales revenue from 2023 to 2025 will be 15.00 million 17.42 / 1.983 billion yuan, an increase of 18.8%, 16.1% and 13.8% respectively over the same period last year. The net profit of 0.71 pound 105 won was 143 million yuan, an increase of 132.3%, 46.8% and 36.8% over the same period last year. Cover for the first time, give "overweight" investment rating.

Risk hint: product technological innovation risk, market competition aggravating risk, income seasonal risk, goodwill impairment risk.