financial data

H1 in '24: Revenue 6.332 billion yuan, +12.93% YoY, net profit to mother 0.193 billion yuan, +105.26% YoY, net profit not attributable to mother 0.16 billion yuan, +173.71% YoY.

Q2 '24: Revenue of 3.763 billion yuan, +4% YoY, +46% month-on-month, gross profit margin 21.8%, YoY +1.3pct, +3.5pct month-on-month. Net profit to mother was 0.132 billion yuan, +78.3% YoY, +114% month-on-month; net profit without return to mother was 0.113 billion yuan, +113.2% YoY, +139% month-on-month. Analysis: The increase in gross margin mainly benefits from the sharp increase in the gross margin of incoming calls. Net profit due to the year-on-year increase. In addition to the incremental contribution to gross profit, the company's profit and loss items such as credit impairment losses continued to be optimized.

Business split

1. Power equipment business: H1 revenue in '24 was 3.674 billion yuan, +13.37% year on year; net profit to mother was 0.213 billion yuan, + 44.64% year on year. By industry, the revenue side grid is growing the fastest.

1) Revenue from new energy generation was 1.293 billion yuan, +0.52% year on year, gross profit margin 18.91%, +0.46pct year on year; winning bid amount still achieved a significant year-on-year increase.

2) Grid revenue was 1.007 billion yuan, +70.05% year over year, gross profit margin of 25.92%, +1.31pct year on year; the sharp increase in revenue benefited from the company's large-scale bid for Guonan Grid distribution network equipment procurement.

3) Revenue from strategic emerging industries was 1.373 billion yuan, +0.85% year over year, gross profit margin 21.06%, -2.15 pct year on year.

At the overseas level, products such as H1 and 33KV ring network cabinets have passed overseas certification in 24, won bids for many overseas power conversion and distribution construction projects, and have been highly recognized by overseas customers.

2. Electric vehicle charging network business: H1 revenue in '24 was 2.658 billion yuan, +12.32% year on year; net profit to mother was 0.02 billion yuan, a loss of 0.033 billion yuan compared to the same period last year.

1) Charging operation, H1 charging capacity of 5.8 billion degrees in 24 years, +42% year-on-year; 2) Charging sales. The company has established more than 270 wholly-ownership/joint ventures nationwide, including more than 160 state-owned enterprises such as government investment platforms and public transport groups; investment suggestions

In the traditional business, the company's bid amount on the new energy generation and power grid side all increased significantly year-on-year, helping the company's traditional business achieve revenue growth of about 20%, and the net profit growth rate is better. In the telegraph business, in addition to 0.595 million charging terminals, the core of the company is deeply tied to partners in joint ventures across the country, and charging operations are expected to contribute significantly to profit elasticity.

We expect the company's net profit to be 0.7, 0.95, and 1.26 billion yuan respectively for 24-26, corresponding PE of 26, 19, and 14X, maintaining a “buy” rating.

Risk warning: competition in charging operations intensifies, overseas development falls short of expectations, traditional business repayment risks