The company is deeply involved in the field of power supplies, and its products continue to expand
The company was founded in 1999 and listed in 2017. The company is deeply involved in the field of power supplies and is committed to providing competitive power supply and component products and solutions to the global market. The company implements the “2+X” strategy, which is based on power electronics technology, based on energy products and lighting products, and incubates a “2+X” strategic layout supported by products such as automotive power supplies and communication power supplies.
The transformer boom is high, and the company is going overseas at an accelerated pace
Affected by power grid upgrades, new energy construction, etc., demand for transformers in overseas markets is booming, and supply capacity is relatively insufficient. The company completed the development of a 35kV North American step-up transformer in 2020, and passed UL certification at one time. The company has a strong overseas sales and after-sales service network. At the same time, it continues to increase its channel layout, and the share of direct sales is expected to increase. The company is actively improving the global production capacity layout, and factories in the US and Mexico are progressing. On the product side, the transformer product line continues to expand, gradually extending from step-up transformers to distribution transformers, box-type substations, etc.
Magnetic components fully benefit from growing demand for photovoltaics
Magnetic components/inductors are important components of inverters. They account for about 14% of the cost of inverters, and are high-value components. The future will fully benefit from the growing demand for photovoltaics. The company's new energy business customers are mainly leading inverter companies, and continues to expand small and medium-sized customers.
Investment advice
The company is expected to achieve revenue of 43.94, 53.56, and 6.903 billion yuan respectively in 2024-2026, +21.04%, 21.90%, and +28.88% year-on-year; net profit to mother is 3.59, 4.45, and 590 million yuan respectively, +71.44%, +23.93%, and +32.72% year-on-year respectively. The current stock price corresponds to 2024-2026 PE valuations of 24x, 19x, and 14x, respectively. It was covered for the first time and gave a “buy” rating.
Risk warning
Overseas market expansion falls short of expectations, risk of fluctuations in raw material prices, and exchange rate risk.