Deeply cultivate the power information business and continue to innovate and develop new products
The company is committed to improving professional service capabilities in the field of smart grids. Its business covers all services from power consulting and design, system integration, engineering construction to operation and maintenance.
In 2023, the company's system integration equipment/construction and operation and maintenance/power design business achieved revenue of 696/3.07/151 million yuan respectively, an increase of 2.6%/125.3%/11.1%, corresponding gross margin of 35.55%/43.14%/63.72%.
In addition, the company is actively developing innovative products: in the field of new energy power generation, developing integrated microgrid energy management platforms and distributed group control integrated terminals; applying artificial intelligence algorithms and edge intelligent analysis gateways in power transmission and transformation; and developing primary and secondary integration equipment, distribution network self-healing systems, and 400V self-investment solutions. The company's new products are expected to continue to increase the company's performance.
Electricity informatization construction is on the rise. The company has a first-mover advantage. As the share of new energy power generation and the terminal electrification rate gradually increase, power informatization has become the only way to build a new power system. In March 2023, the National Energy Administration issued “Certain Opinions of the National Energy Administration on Accelerating the Digital and Intelligent Development of Energy”, which highlights the basic requirements for promoting the deep integration of digital technology in the power industry with the real economy and empowering the digital intelligent transformation and upgrading of traditional industries. It is estimated that during the “14th Five-Year Plan” period, the scale of investment in China's power grid industry will reach 6.12 trillion yuan, and the share of smart grids will also increase. Since its establishment, the company has always been committed to the innovation and application of cutting-edge power information technology, formed a professional R&D team, and built power information communication networks in more than half of the cities in the Jiangsu region, with a strong first-mover advantage.
Based in Jiangsu, continuing to expand outside the province
The overall ranking of the power system in Jiangsu Province is at the top of the national provincial network, and its many capabilities, such as power load supply, technological innovation, and engineering quality, are leading in the country. The company is based in Jiangsu and has participated in construction services for power design, system integration, construction and operation and maintenance projects in many parts of the province for many years. Currently, the company has established sales divisions in East China, South and North China, and is working to gradually expand the company's business to the whole country.
In 2023, the company's business outside Jiangsu Province reached 48%, opening up new growth space for the company.
Profit forecasting
We are optimistic about the company's continued development of new products and new regions under the power information technology business development trend. We predict that the company's revenue for 2024-2026 will be 14.0, 18.3, and 2.37 billion yuan, respectively, and EPS will be 0.96, 1.21, and 1.53 yuan, respectively. The current stock price corresponds to PE of 16.9, 13.4, and 10.6 times, respectively, covering the first time, giving it a “buy” investment rating.
Risk warning
The development of power grid informatization falls short of expectations, business expansion outside the province falls short of expectations, systemic risks, etc.