Incident: The company released its 2023 performance forecast. It is expected to achieve net profit of 180-230 million yuan for the whole year, an increase of 10%-35% over the previous year; net profit without deduction of 178-217 million yuan, an increase of 15%-40% over the previous year.
Performance has improved steadily, and products have been continuously upgraded and innovated. The company has always maintained a steady business development model. In 2023, when the macroeconomic environment is weak, through continuous product upgrades and innovations, and vigorously promoted its main EMS 2.0 and EMS 3.0 products, it still achieved steady and positive performance. By the end of September '23, the company had more than 50,000 projects registered, with an order value of about $75-80 billion, which is expected to gradually convert revenue over the next few years. EMS 3.0 products are integrated into the optical storage and charging platform on the basis of the 2.0 platform to truly achieve integrated flexible control of source network load storage and charging. At the same time, EMS 3.0 will combine the company's “awareness” of the industry with artificial intelligence AI to achieve intelligent energy management. Currently, EMS 3.0 has entered the gradual promotion stage and is expected to contribute revenue to the company starting in '24.
Electricity reform policies continue to advance, and there is a broad space for enterprise microgrid products. The Development and Reform Commission recently issued the “Electric Energy Quality Management Measures (Interim)”, which stipulates power quality management in the power generation/transmission/distribution/use process. New energy stations, distributed power sources of 10 kV or more, and energy storage should be equipped with online power quality monitoring devices to be designed, constructed, inspected and put into operation at the same time as the main project, and implemented on April 1, 24. The company's EMS products are equipped with a power quality management system module, which is expected to be promoted at an accelerated pace with the implementation of the Measures.
Vigorously expand overseas markets, and it is expected that volume will be released quickly. In 2023, the company continued to expand overseas markets. The first batch of pilots was Europe and Southeast Asia, and it is expected that it will continue to expand to Africa and South America in the future. As an advanced electricity management model, microgrids are currently being popularized and promoted at home and abroad. The company has a clear price advantage over overseas competitors, and is expected to expand rapidly in the future.
According to the company's 23-year performance forecast, operating income was lowered and gross profit margin was raised. The company's earnings per share for 23-25 were 0.99/1.38/1.75 yuan, respectively (the original forecast was 1.05/1.47/2.01 yuan). Referring to the valuation level of comparable companies, the company was given a price-earnings ratio of 19 times in 24 years, and the corresponding target price was 26.22 yuan, maintaining the purchase rating.
Risk warning
Risk of falling gross margin; risk of increase in the size of accounts receivable; risk of other returns falling short of expectations; risk of increased market competition; risk of market penetration falling short of expectations