Starting with the early toroidal transformer business, the company gradually formed two major business segments: the lighting power supply-related industry and the energy industry, which mainly focuses on transformers. The latter gradually became the core of the company's business. The company cooperates with leading downstream equipment system companies for products such as step-up and conversion, and is widely used in the fields of new energy photovoltaics and energy storage, and has gradually opened up overseas markets such as North America. Against the backdrop of the return of manufacturing, the development of AI, and the increase in the penetration rate of new energy sources, the problem of old US power grids continues to be revealed. There is great potential for investment in power grids, and the supply of transformers is tight. The company began international development very early. In recent years, it has begun to actively lay out domestic and foreign production capacity and rich channels. It is expected that the company may have more room for its subsequent business scale and profit level.
With 2+X layout, transformers are gradually becoming the core of the business. The company was founded in 1999 and listed on the Shenzhen Stock Exchange in 2017. The company's early products were mainly toroidal transformers. Subsequently, in line with its development trend, it was extended to the two major fields of consumption and industry in line with market demand, forming two major business categories of lighting power supplies and lighting, energy products mainly transformers, and incubation businesses such as automotive inductors and charging piles, that is, the company's “2+X” strategy. Currently, energy products such as transformers are gradually becoming the core of the company's business.
Leading the internationalization process, increasing the overseas layout of transformers. The company began internationalization very early, and established companies in the United States, Japan, Malaysia, Singapore, Mexico and other places to be responsible for local market development, after-sales service, and even manufacturing. The company can provide customers with localized and customized services. Its new energy transformers, industrial control transformers, and high-frequency inductors have entered the supply chain of large enterprises such as Sunshine, Hitachi, and Schneider. The company's energy products cover complete systems such as oil/dry transformation, box transformation, phase shift transformation, etc., and have opened up a situation in North America and other markets. The company raised 1.18 billion yuan last year to expand production and began construction of transformer production bases in Mexico and the United States. At the same time, the company is actively expanding overseas channels and cooperating with more direct channel customers. In summary, it is expected that the business scale of the company's transformers and other energy products is expected to rise to the next level.
Global grid investment is accelerating, and North America has great potential. Global energy and electricity capital expenditure was relatively weak in 2015-2020. In recent years, domestic and foreign power grid sectors have increased capital expenditure. The driving factors include the continuous increase in the penetration rate of new energy sources, the return of manufacturing industries in some regions, and the continuous increase in electricity consumption driven by emerging industries such as AI. Take North America as an example. Against the backdrop of the return of manufacturing and the increase in the penetration rate of new energy sources, the problem of the old US power grid continues to be revealed. Its power grid has great potential for future investment, and transformers bear the brunt. Local transformer manufacturing capacity and upstream support are limited in the US. Mexico, Canada, and China are the main importers of transformers, and companies that are the first to enter its supply system are expected to directly benefit.
The lighting and inductance business is developing steadily, and new businesses are being actively cultivated. The company's lighting and inductance business is developing steadily, and the lighting business has formed long-term and stable strategic cooperation with many well-known international companies. Inductive devices are equipped with the world's leading inverter manufacturers. Considering the spatial growth rate of the photovoltaic market, it is expected to maintain steady development in the future. In addition, the company relies on its accumulation of new energy and inductance technology, and is also actively incubating equipment related to automotive inductors, vehicle power supplies, energy storage and charging piles, which is expected to bring new growth.
Investment advice: The company's traditional business is operating steadily and is currently increasing investment in energy products at home and abroad. The current market demand for these businesses is strong, and it is expected that the company's business scale will rise in the future. Covered for the first time and given an “added” rating.
Risk warning: grid investment falls short of expectations, overseas trade risks, fluctuating raw material prices.