Net profit after deducting 2024Q1 grew 36.6%, and the growth rate of revenue and net profit is expected to recover in the second quarter. 2024Q1 achieved revenue of 1,305 million yuan, up 0.60% year on year; net profit of 95 million yuan, up 8.57% year on year; realized net profit deducted from net profit of 101 million yuan, up 36.63% year on year; in terms of gross margin, 2024 Q1 company's comprehensive gross margin was 25.81%, an increase of 2.7 pcts year on year, mainly due to an increase in export sales ratio, which led to an increase in gross sales margin over the same period last year; net margin was 7.16%, an increase of 6.51 pcts year on year, and overall performance increased steadily.
Business split: The 2024Q1 power transmission, distribution and control equipment manufacturing industry achieved revenue of 1,133 billion yuan; energy storage series products achieved revenue of 110 million yuan; overall digital solutions achieved revenue of 57 million yuan, domestic sales revenue of 912 million yuan. Overseas revenue performance was outstanding, with sales revenue of 389 million yuan, accounting for 30%, a significant increase over 2023.
The core products are continuously upgraded to meet the application needs of different scenarios. The company is a leading dry-type transformer. Currently, it can produce synthetic ester, natural ester and oil-immersed transformers with a capacity of 145 KV and below a voltage rating of 60 MVA to meet the needs of new energy, high-end equipment, etc. In 2023, the company's transformer business accounted for 61.3% of revenue. On April 18, 2024, the company signed 739 million yuan contracts for various types of transformers with overseas EPC customers, and the overseas market is progressing steadily.
The revenue growth rate of the energy storage and digital business is fast and is expected to lead the company's “14th Five-Year Plan” development. The company's 2024Q1 energy storage series products achieved revenue of 110 million yuan, exceeding 2023H1 energy storage revenue of 171 million yuan, and the overall digital solution achieved revenue of 57 million yuan, exceeding the revenue of digital solutions for the full year of 2023. By the end of 2023, the company had accepted more than 600 million yuan of digital factory overall solution business orders. On April 12, 2024, the company announced the signing of a new digital factory project contract of 297 million yuan. The digital business and energy storage business are expected to become the company's new growth curve.
Profit forecast and investment advice: We expect the company's revenue to remain unchanged at 91/120.4/15.14 billion yuan in 2024 to 2026, with corresponding net profit unchanged at 7.8/10.5/1.35 billion yuan, respectively. Based on the weakening correlation between the company's market performance and the index, beta will be lowered from 1.4 to 1, WACC will be lowered from 7.7% to 5.5%, and the target price will be raised from 48.30 yuan/share to 67.51 per share, maintaining the “better than market” rating.
Risk warning: 1. Relevant policies and power grid investment fall short of expectations; 2. Installed capacity of new energy and energy storage falls short of expectations; 3. Prices of raw materials have risen sharply; 4. Trade frictions.