The company plans to invest 1.5 billion yuan to build a charging and storage business production line

Green Energy Huichong announced that it intends to sign the “Green Energy Huichong Xianyang R&D and Manufacturing Base Project Investment Contract” with the Xianyang Economic and Technological Development Zone Management Committee. The company plans to invest in the construction of the “Xianyang R&D and Manufacturing Base Project” in the Xianyang Economic and Technological Development Zone, with a total investment of about 1.5 billion yuan. Among them, the first phase (investment of 750 million yuan) will build battery pack production lines and charging pile production lines, energy storage system production lines, green energy Huichong Group headquarters, R&D headquarters, and supporting living areas; the second phase (investment 750 million yuan) will build charging product production lines and energy storage equipment production lines. The charging pile industry continues to be prosperous, and the company plans to expand production to enhance competitiveness. We maintain our original profit forecast. The company's net profit for 2023-2025 is 0.62, 1.92, and 363 million yuan, and EPS is 0.09, 0.29, and 0.55 yuan/share, corresponding to the current stock price of 80.7, 26.1, and 13.8 times, maintaining the “buy” rating.

There are no large short-term capital expenses for this investment project

For this investment project, the platform company designated by the Xianyang Economic and Technological Development Zone Management Committee to obtain project land and carry out project construction on behalf of the company in accordance with the law. Under this construction model, the company does not have large capital expenses in the short term other than having to pay proxy construction funds. After the project is fully completed, the company will buy it back as a whole. The construction cycle of the project is 24 months.

The company's performance remained high month-on-month, and production expansion guarantees future shipping demand. The company achieved revenue of 259 million yuan in 2023Q3, +389.81% year-on-year, +67.44% month-on-month, and realized net profit of 0.21 million yuan, +265.36% year-on-year, and +396.76% month-on-month. The overall gross margin and net profit margin of 2023Q3 companies were 22.12% and 8.13%, respectively, -1.78/+5.78pct, respectively. Net interest rates increased significantly. The company's performance is growing rapidly. It is necessary to expand production capacity accordingly to meet enterprise development needs, and continue to promote the development of the company's charging stations and energy storage business.

Risk warning: Competition in the charging pile industry is intensifying, and overseas travel is falling short of expectations.