Incidents:

In January 2024, the company announced that it will use centralized bidding transactions. The total repurchase capital will not be less than 50 million yuan, not more than 10 million yuan, and the repurchase price will not exceed 16.92 yuan/share. The estimated number of shares to be repurchased is about 295,5083 shares to 591,0165 shares (estimated at the above limit of 16.92 yuan/share), accounting for 0.23% to 0.45% of the company's total share capital. As of March 31, 2024, the company has repurchased a total of 2,317,600 shares, accounting for 0.18% of the company's total share capital.

Comment:

The repurchase shows confidence and waits for equity incentives to be implemented. Based on confidence in the company's future development and in order to further improve the company's long-term incentive mechanism and effectively protect the legitimate rights and interests of all shareholders, the company plans to use its own funds to repurchase some of the company's A shares through centralized bidding transactions. The repurchases will be used in the equity incentive plan.

The energy storage solution was applied, and the product technology was recognized. The company's comprehensive energy storage system solutions include large-scale energy storage system solutions, distributed energy storage system solutions, and integrated optical storage and charging system solutions. In June 2023, Wolong Energy Storage provided a comprehensive energy storage system solution for the Hubei Tianmen Shenneng integrated wind and solar storage project. The first phase of the project, 12mW/24MWh, has successfully passed the inspection and officially put into operation, marking a major breakthrough in Wolong Energy Storage's entry into the energy storage market. Furthermore, relying on Wolong's strong brand background and industry-leading innovative technology, the company quickly received wide recognition in the industry and won the “2023 China Energy Storage Industry's Best New Energy Storage Technology Innovation Award”.

Focus on developing aeronautical electric drive systems and actively expand the electric aviation industry. The company has been involved in the electric aviation industry since 2019, and has followed the “3+1" strategic guidance to successfully build a series of products covering the three power levels of “small, medium and large”, and also established a set of airworthiness standards for civil aviation, which are mainly applicable to the eVTOL and drone fields. As of June 2023, the company's low-power typical specifications, high-power aeronautical electric power systems, and 30kw channel electric systems have all been tested, and all indicators have met the expected requirements. In addition, the company is active in the field of electric aviation. It has many customers in the field of electric aviation, and has established cooperative relationships with many well-known domestic and foreign companies, such as COMAC, Shanhe Star Airlines, and Rolls-Royce. In September 2022, the company and COMAC jointly built the “Aviation Electric Power Systems Innovation Center” to promote the commercialization of electric aviation technology; in October 2023, the “Aeronautical Electric Power Systems Division” was also jointly built with COMAC.

Profit forecast: The company's net profit for 2023-2025 is expected to be 11.25/12.96/1,582 billion yuan, respectively, and the corresponding PE is 17/15/12 times, respectively. First coverage, giving a “buy” rating.

Risk warning: customer growth falls short of expectations, profit forecasts and valuation judgments fall short of expectations