Q1 Revenue increased year-on-year, and gross margin increased month-on-month
The company has been deeply involved in the field of power electronics for more than ten years, laying out four major fields: power quality equipment, electric vehicle charging piles, battery formation and testing equipment, and new energy conversion equipment. The company's Q1 revenue in 2014 was 599 million yuan, +33.81% year on year, and net profit to mother was 66 million yuan, +5.98% year over year. We maintain the company's 24-26 net profit forecast of 5.4/7.1/90 billion yuan. Refer to the average PE 19.3 times the average PE according to the 24-year Wind consensus forecast. Considering that the company has technical accumulation and channel advantages and will continue to benefit from the development of the charging and storage industry, we gave the company a 24-year target PE 23 times, a target price of 39.79 yuan (previous value of 40.02 yuan), maintaining a “buy” rating.
Q1 Rates increased month-on-month
The company achieved gross margin/net profit margin of 39.54%/10.97% in Q1, a year-on-year change of -2.98/-3.01pct, and a month-on-month change of +0.87/-3.23pct. The gross margin still increased month-on-month. Overall, sales/management/finance/R&D expense rates for Q1 in '24 were 28.71%/13.94%/4.92%/0.01%/9.84%, year-on-year change +0.52/+0.17/-0.02/-0.12pct, and +4.39/+1.46/+1.37/+0.44/+1.13pct compared with the full year of '23. The rate increase was mainly due to a slowdown in Q1 revenue growth.
The charging pile industry is in strong demand, and domestic and overseas markets are making concerted efforts
The company's revenue from charging and switching services in '23 was 850 million yuan, +99.58% year-on-year. According to data from the China Charging Alliance, as of March '24, China had accumulated 2.09 million charging stations, an average monthly increase of 79,000 over the past year. Along with the rapid increase in sales of new energy vehicles and the continued strengthening of policies, the profitability of charging operations is also gradually improving. The number of new domestic charging piles is expected to maintain high growth, and the company is expected to fully benefit. In addition, the company has established in-depth cooperation with traditional foreign energy companies such as BP and Shell to enjoy overseas dividends with low domestic labor costs and leading technology, and establish a first-mover advantage. Demand for charging piles at home and abroad has been released in large quantities in 24 years, and the company is expected to maintain a high growth rate in the charging pile business.
Being in the first tier of the PCS industry, it has benefited from the accelerated expansion of the energy storage business of booming domestic energy storage companies, achieving revenue of 910 million yuan in 23 years, +255.65%; gross profit margin of 33.13%, -10.67pct year on year, mainly due to changes in the shipping market structure combined with increased competition in the industry. The company ranks first in the PCS industry. According to CNESA, the company ranked fourth in the PCS supply scale among the new new energy storage projects put into operation in China/the world in '23, up from '22.
We expect domestic energy storage capacity to reach 65-80 GWh in 24, with a neutral growth rate of 56%. The company is expected to continue to benefit from the boom in the global energy storage market and maintain rapid growth in performance.
Risk warning: Competition in the industry is intensifying, demand for energy storage and new energy vehicles falls short of expectations, and project progress is lagging behind.