Results for the first three quarters of 2024 were in the median forecast, and the company's net profit to mother achieved rapid growth

The company released its three-quarter report for 2024, and the results were in the middle of the forecast. In the first three quarters of 2024, the company achieved operating income of 10.49 billion yuan, +11.56% year over year; realized net profit due to mother 0.45 billion yuan, +101.23% year over year; realized net profit deducted from mother 0.39 billion yuan, +122.13% year over year. Among them, 2024Q3 achieved operating income of 4.16 billion yuan, +9.55% year over year; realized net profit of 0.25 billion yuan, +98.26% year over year; realized net profit deducted from non-mother 0.22 billion yuan, +95.84% year over year. The company's comprehensive gross profit margin for the first three quarters of 2024 was 20.5%, +1.1 pcts year on year; net profit margin was 4.1%, +2.0pcts year on year. The company's sales/management/R&D/finance expense rates for the first three quarters of 2024 were 5.4%/5.7%/3.7%/1.4%, respectively, -0.5/+0.1/+0.0/-0.1 pcts year-on-year, respectively. We maintain the original profit forecast. The company's net profit for 2024-2026 is 0.87, 1.471, and 2.028 billion yuan, respectively, and EPS is 0.82, 1.39, and 1.92 yuan/share. The current stock price corresponds to PE of 26.8, 15.8, and 11.5 times, respectively, to maintain a “buy” rating.

The company's two major sectors, “intelligent manufacturing+integrated services” and electric vehicle charging networks, maintained a good momentum of development

(1) The company vigorously promotes a standardized and modular “product life cycle management” platform, greatly improving product standardization coverage, and effectively reducing costs and optimizing quality while improving product design and production efficiency.

In the first half of 2024, the company's bid amount in the field of new energy power generation increased relatively well compared to the same period last year. Among them, in the Datang Group framework tender project, the company ranked first in the bid volume for prefabricated cabin substations and the second largest winning bid for new energy tanks. In cooperation with Huaneng Group, while winning bids for prefabricated cabins and new energy tanks for many years, the company achieved a breakthrough bid for GIS high voltage switch products in 2024, further reflecting the customer's recognition of the company's products and technology. In terms of overseas layout, in the first half of 2024, the company successively completed the development and certification of international products such as 33kV ring network cabinets and medium voltage environmentally friendly gas cabinets. The company's power equipment products have successfully landed in more than 50 countries around the world. (2) According to data from the China Charging Alliance, as of September 2024, Telco had 0.64 million public charging stations (corresponding market share of about 19.2%), of which 0.384 million DC charging stations (corresponding market share of about 25.6%), all ranked first in the industry.

Risk warning: The profitability of charging pile operation falls short of expectations, and competition in the charging pile industry is intensifying.