A leading company in primary transmission and distribution equipment, with steady and improving performance. As a leading enterprise in the field of primary transmission and distribution equipment, China Xidian has provided key equipment and services for many domestic and foreign ultra-high voltage transmission projects with deep historical experience and technical accumulation since its establishment in 1953. The company actively expands overseas markets, with products and services in more than 80 countries around the world, enjoying a good reputation and brand influence. In 2018-2023, the company's revenue grew from 13.68 billion yuan to 20.848 billion yuan, achieving a compound annual growth rate of 7.26%; the company's net profit to mother increased from 569 million yuan to 885 million yuan, achieving a compound annual growth rate of 7.64%, and the company's overall operating performance was steady and positive.
The core competitiveness is outstanding, and the company's equipment won the bid ranking first
Technical advantages highlight core competitiveness. The company won first place in the bid for the State Grid UHV equipment and power transmission and transformation equipment. Based on its core competitive advantages, the company's equipment is popular in the market: in 2023, the company's State Grid UHV equipment achieved a bid amount of 7.928 billion yuan, an increase of 913.79% over the previous year, with a bid share of 19.56%; the company's power transmission and transformation equipment achieved a bid amount of 5.394 billion yuan, an increase of 71.35% over the previous year, and the winning bid share was 7.56%. It can be seen that the market share of the company's first-time equipment bid has increased year by year and has steadily taken a leading position in the industry, reflecting the strategic connotations of steady progress in the business and consolidation and expansion of the conventional product business.
Optimize overseas business layout and create growth points in the international market
The company actively explores overseas markets. As the “Belt and Road” construction progresses, the company has successively built manufacturing bases in overseas countries such as Egypt, Indonesia, Malaysia and Croatia, providing important support for expanding overseas market share and strengthening the influence of the “XD” brand. As of October 2023, the company's overseas business has covered more than 100 countries and regions around the world, with a cumulative order amount exceeding 25 billion yuan, and the overseas base has produced more than 150 power transmission and transformation equipment. In the future, the company is expected to promote the transformation of the company's overseas business from stand-alone equipment exports to general engineering contract business output by deeply participating in overseas AC/DC projects, taking advantage of the production advantages of existing industrial bases, creating a growth point in the international market, and further enhancing China Western Electric's overseas influence.
Investment advice
As a leading enterprise in the field of primary equipment, China Xidian has shown strong growth momentum with its deep technical accumulation of high-voltage transmission and transformation equipment, smart grid solutions, and forward-looking layout of new energy grid-connected technology. With the transformation of the global energy structure and the acceleration of smart grid construction, the company is expected to further benefit from industry growth trends. We expect net profit to be 12.23/20.24/2,515 billion yuan on 24/25/26, respectively, corresponding to PE 32/19/16 times, respectively. First coverage, giving the company a “buy” rating.
Risk warning
Grid investment falls short of expectations; UHV construction falls short of expectations; industry competition increases risks.