The company's recent situation
Recently, we attended the Weisheng Information Investor Conference. At the conference, the company launched its annual new products and showcased innovative products and overall solutions in various fields including digital grids, communication chips, and smart cities. We believe that Weisheng Information has the ability to provide comprehensive solutions from low-level chip design, and that domestic digital grid upgrades and continuous breakthroughs in overseas orders are expected to support steady growth in performance.
reviews
Leading product strength in multiple fields. The company showcased high-quality products in various fields at the conference: 1) In terms of digital grids, the company's new energy series four installable products covered all distributed photovoltaic application scenarios, solved the problem of orderly access to distributed photovoltaics, and effectively supported the high-quality development of new power systems. 2) In terms of communication chips, the company's HPLC+HRF dual-mode communication chips target smart meters and distribution network automation services to provide communication solutions for smart grids and smart cities; HPLC power line carrier communication chips have been widely used in the field of power Internet of Things; silicon carbide power MOS chips can greatly increase power density and are widely used in charging piles and new energy fields. 3) In terms of digital smart cities, the company's overseas intelligent ultrasonic water meter products have comprehensive international certification; NB-IoT water meters have low power consumption, wide coverage, and high connection numbers, improving remote meter reading efficiency; and load management devices monitor and control power loads in real time to solve the problems of uneven grid load and insufficient power supply during peak periods. We believe that the company is consolidating its product capabilities in various fields and is expected to accelerate order breakthroughs in the context of the construction of new domestic power systems and the upgrading of overseas hydropower and gas systems.
Continued breakthroughs in overseas markets. On the product side, the company has obtained many product certifications from Asia, the European Union, North America, etc., laying a solid foundation for the international development strategy; on the order side, the company has obtained overseas orders in various fields such as overseas electricity AMI, smart water markets, distribution network automation, new energy access, and smart city construction. In terms of geographical distribution, the company has established certain advantages in markets such as Saudi Arabia, Bangladesh, Indonesia, Egypt, and Mexico, and plans to continue expanding globally in the future. On May 15, 2024, the company held separate talks with Vietnam's Ministry of Industry and Trade and Vietnam Electric Power Group (EVN) in Hanoi, the capital of Vietnam. The company has rich experience in the intelligent level of distribution grids, enhancing power reliability, optimizing the use of power energy, and reducing power supply line losses. We believe it is expected to lay a solid foundation for a breakthrough in Vietnam's electricity and energy market.
Profit forecasting and valuation
Maintain profit forecasts and outperform industry ratings. Considering that going overseas for power equipment is expected to drive the sector's valuation upward, the target price was raised by 13% to the target price of 45 yuan (based on 32/26x 2024/25e P/E). The current stock price corresponds to 27/21x 2024/25e P/E, with 20% upward space.
risks
New product development progress falls short of expectations; overseas progress falls short of expectations.