Core views:
Enterprise microgrid leader, deeply involved in industrial and commercial electricity and energy management. The company was founded in 2003, starting with user-side smart power meters. The product line was iteratively upgraded several times, and gradually grew into a leading enterprise in the Chinese microgrid industry. The equity structure is stable, the core management team is experienced in the industry, and equity incentives are tied to core employees. Profitability is steady, and gross margin is stable above 45%. In 24Q1, revenue was 242 million yuan, +5.07% YoY, and net profit to mother was 45 million yuan, +8.18% YoY.
Consumption of new energy sources has spawned the need for specialized electricity and energy management, and the accelerated development of enterprise microgrids is imminent.
(1) Consumption costs are transmitted to users, and terminal electricity prices are rising: the pressure on new energy consumption costs is increasing, combined with the promotion of market-based electricity, boosting terminal electricity prices, and electricity and energy management services welcome good opportunities for development.
(2) Electricity shortages and surpluses coexist, and the price difference between peaks and valleys widens: the penetration rate of new energy sources is increasing, the balance between electricity supply and demand is becoming more difficult, and electricity shortages and surpluses occur frequently. Over the past 21 years, China has experienced many power shortages; the National Energy Administration expects the peak load to increase by more than 100 million kilowatts year-on-year in the summer of '24, and electricity supply is tight in some regions. In April '24, the average industrial and commercial peak price spread in central and eastern China generally exceeded 0.50 yuan/kWh, and the peak and valley price spreads in spot markets such as Shandong and Guangdong have also widened, increasing the willingness of enterprises to deploy microgrids. We estimate that the market space for enterprise microgrids is expected to be close to 100 billion yuan per year.
Scenario thinking+perfect ecology+flexible manufacturing+extensive channels, the company's competitive advantage is remarkable. (1) Scenario thinking: Focus on continuous iteration in 18 key industries to form customized solutions. Rich project experience+long-term service guarantee, customer stickiness continues to increase. (2) Perfect ecology+flexible manufacturing:
A cloud-edge-end product system has been formed, with efficient small-batch and multi-variety production capabilities, built with service and cost advantages, and a 23-year gross margin of 46.39%. (3) Wide range of channels: domestic and foreign+direct distribution+comprehensive online and offline layout. The focus is on expanding design agency channels at the front end and strengthening drainage; cultivating agents at the back end to speed up project implementation; and deploying overseas markets such as Southeast Asia and Europe.
Profit forecast and investment advice: The estimated net profit for 24-26 will be 2.55/3.20/396 million yuan, +26.6%/25.6%/23.7% year-on-year. Refer to comparable companies and give net profit of 25x PE for 24 years, corresponding to a reasonable value of 29.68 yuan/share. First coverage, giving a “buy” rating.
Risk warning: New business and new market expansion fall short of expectations; electricity improvements fall short of expectations, etc.