Incidents:

The company released its 2024 semi-annual report: the company's revenue for the first half of 2024 was 6.997 billion yuan (+26.11%); net profit due to mother was 1.15 billion yuan (+32.23%); net profit of 1.078 billion yuan (+32.13%) after deducting non-net profit. Net cash flow from operating activities was $0.26 billion, an increase of 0.083 billion yuan over the previous year.

Intelligent distribution of electricity: Simultaneous development at home and abroad, actively expanding the field of new energy sources. During the reporting period, the company's intelligent electricity distribution segment generated revenue of 5.38 billion yuan (+26.28%) and achieved net profit of 0.971 billion yuan (+29.37%). The total number of on-hand orders was 14.894 billion yuan (+25.74%), of which 8.675 billion yuan (+16.94%) in China; 6.22 billion yuan (+40.47%) overseas.

The power grid has continued to take the lead in winning bids, the coverage rate of new energy central enterprises has increased, provincial companies have dug deep into demand, and major industry customers such as local state-owned enterprises have increased their development; the company has maintained an industry-leading position in tenders for the State Grid and Southern Grid, and has also achieved important results in market expansion for non-grid and major industry customers. The company's overseas strategy is beginning to take shape. Overseas, it has established a mature sales system and rich customer resources, and its overseas sales network has covered more than 70 countries and regions around the world. The company continues to deepen its localization operations and has made significant progress in regional markets such as Europe, the Middle East, Asia Pacific, America and Africa. In particular, it has won good bids for projects in the European and Middle East markets.

Medical services: Consolidate the characteristics of critical illness rehabilitation, and significantly improve the brand effect. The company's medical services sector achieved revenue of 1.613 billion yuan (+26.53%), of which the rehabilitation business revenue was 0.814 billion yuan (+36.54%), and the comprehensive and other medical business revenue was 0.798 billion yuan (+17.71%). It has 34 hospitals, including 28 rehabilitation hospitals, with a total number of beds exceeding 10,000. The company continues to expand the layout of rehabilitation hospitals and add 6 new hospitals, bringing the total number of hospitals to 34, with a total number of beds exceeding 10,000, further consolidating its leading position in the field of rehabilitation medicine. While promoting discipline construction and enhancing brand influence, the company continues to make efforts in the field of critical illness rehabilitation, focusing on building three major specialty centers: an offline ventilator center, a chronic coma promotion center, and a brain tumor rehabilitation center. In order to further optimize the quality system, the company continues to improve the quality of medical care, strengthen the construction of the medical quality system, and make full use of IT systems for management. Against the backdrop of an increasingly aging population, the company is expected to further promote revenue and profit growth through a large-scale rehabilitation market layout.

Profit forecast: Considering the steady growth of the company's intelligent electricity distribution business, the future expansion of the rehabilitation medical business is highly certain, combined with the target guidelines of the company's equity incentive plan. The company's total revenue for 2024-2026 is estimated to be 14.649/18.267/22.051 billion yuan respectively, net profit to mother is 2.53/3.274/4.112 billion yuan, EPS is 1.79/2.32/2.91 yuan respectively, and corresponding PE is 16.93/13.09/10.42 times, respectively, maintaining the company's “buy” rating.

Risk warning: The bed climb did not meet expectations, the power grid bid fell short of expectations, and the health insurance payment policy was risky.