The high growth of new energy business contributes to the increase in profits. 2023H1's revenue was 250 million yuan, + 113.8% compared with the same period last year, and its net profit was 3.597 million yuan, reversing losses over the same period last year. 2023Q2's revenue was 150 million yuan, year-on-year + 108.0%, month-on-month + 56.5%, mainly due to the substantial growth of the company's new energy business. The company's new energy business revenue reached 240 million yuan in the first half of the year, accounting for 93.0%. The net profit of 2023Q2 was 4.292 million yuan, turning a loss into a profit compared with the previous month. From a sub-sector point of view: 1) the company's charging pile-based new energy business is growing rapidly, which is the core of the company's profits; 2) the company has stripped off the thermoelectric business that lost money in the same period last year, and profits focus on the new energy main business; 3) the overall relocation of Jiangquan Industrial Park has led to a substantial decline in railway transport business, and the revenue and profits of the railway transport plate are under pressure.

The layout of the company's charging and storage products is perfect, and the production line is reformed. The company integrates charging, energy storage and microgrid. In terms of charging piles, the layout of each power section of the company is perfect, covering from 7kW AC / DC to 720kW DC charging stack. The company continues to accelerate overseas market expansion, mainly aimed at Europe and Southeast Asian markets, while actively entering the Middle East, Australia, Japan and other markets, some products have passed the EU CE certification, with 60/120/180kW European standard DC charger products. In terms of energy storage, the company has energy storage systems including 30kW/64kWh and 107kW/215kWh. In addition, the company announced in June that it intends to invest 700 million yuan to intelligently transform and upgrade the existing charging piles, energy storage equipment and battery Pack production lines, expand the production scale, and promote the rapid development of the company's charging piles and energy storage business.

The rechargeable pile has high prosperity and broad space at home and abroad. Domestic charging pile scene has a high bearing, according to the Ministry of Public Security, the number of 2023H1 new energy vehicles has reached 16.2 million, the rapid increase in the number of new energy vehicles has led to the demand for charging, and the construction of charging infrastructure has entered the fast track of development. According to the data of China charging Union, 1.72 million new charging facilities were added in China from January to July 2023, including 1.31 million new private piles / public piles. The market space in Europe and the United States is vast. According to AFDC data, the number of public piles held in the United States was 143000 as of 7.31 days, with a DC fast charge ratio of 22.8%. According to Alternative-fuels-observatory data, the number of Q2 public piles held by the European Union was 546000, and DC accounted for 11.4%. The construction of charging pile in Europe and America lags behind, and the ratio of vehicle to pile is significantly higher than that in China. We expect that the construction of pile tip is expected to speed up, the proportion of superimposed high-power DC fast charge is increased, and there is a broad space for overseas markets.

Investment suggestion: we estimate that the return net profit of the company from 2023 to 2025 is 0.72 billion yuan respectively, and the corresponding EPS is 0.11 yuan 0.25 yuan respectively. We believe that there is a strong demand for charging piles at home and abroad, and the company is in the lead in high-power charging products, and the charging pile business is expected to release volume quickly. Refer to the comparable company, give the company 35-40 times PE in 2024, corresponding to the reasonable value range of 8.85-10.12 yuan, cover for the first time, and give the rating of "better than the big city".

Risk hint: the construction of charging piles is not as expected, and the demand for new cars overseas is not as expected.