Incident: On January 18, 2024, Nanwang Technology issued an announcement on the progress of some directors, supervisors and management personnel to increase their holdings of the company's shares. As of the announcement date, some directors, supervisors and managers of the company increased their holdings by a total of 127,618 shares through centralized bidding, with a cumulative increase of $3,041,004.82, which has exceeded 50% of the planned increase in the amount of the “Notice Concerning Plans for Some Directors, Supervisors and Managers to Voluntarily Increase the Company's Shares” disclosed on October 27, 2023. The plan to increase their holdings has not yet been implemented, and the entities that increase their holdings will continue to increase their holdings of the company during the implementation period of the holdings increase plan in accordance with the relevant increase plans.
The steady development of the business and the increase in holdings shows long-term operating confidence: the company issued an announcement stating that some directors, supervisors and managers will increase their holdings of the company from November 1, 2023 to April 30, 2024, with a total increase of not less than 4.4 million yuan (inclusive) and no more than 8.8 million yuan (inclusive). This increase in holdings is mainly due to management's confidence in the company's future development and recognition of the company's long-term investment value. In recent years, the company's business has achieved steady growth. The company's total revenue grew from 580 million yuan in 2019 to 1.79 billion yuan in 2022, with a compound growth rate of 45.6%; net profit to mother increased from 40 million yuan in 2019 to 210 million yuan in 2022, with a compound growth rate of 73.8%. In Q1-3 2023, the company achieved revenue of 1.64 billion yuan, yoy +47.8%; achieved net profit of 160 million yuan to mother, yoy +17.6%, and the performance continued to grow steadily.
Consolidate the traditional advantages of testing and testing and seize the development opportunities of energy storage and robotics: The company is committed to consolidating the traditional advantages of test and testing services. In 2023, the power supply side test and inspection business continued to break down geographical barriers, and the power grid side test and inspection business volume increased dramatically and market share increased dramatically. In addition, the company is also vigorously developing new businesses such as energy storage and robotics. In 2023, the winning bid amount for a single energy storage project exceeded 500 million yuan for the first time, and the position of a leading new energy storage enterprise continued to consolidate and improve; the robot and drone business won the bid for the first time in China Southern Power Grid in 2023, and the competitive advantage of the product was further enhanced.
Investment advice: The company is closely linked with China Southern Power Grid and continues to explore business areas. We expect the company to achieve operating income of 32.70/52.01/7.410 billion yuan and net profit to mother of 2.92/5.03/701 billion yuan in 2023-2025.
The corresponding PE was 39.09/22.69/16.30 times, respectively. It was covered for the first time, and a “gain” rating was given.
Risk warning: market competition risk; risk of the distribution network and inspection robot industry falling short of expectations, etc.