CICC released a research report stating that it covered wasion holdings (03393) for the first time, giving it an outperform industry rating. It is expected that the company's EPS for 2024-2025 will be 0.74/0.92 yuan respectively, with a CAGR of 32%. The target price is 8 Hong Kong dollars. The company is a leading enterprise in the field of energy metering and energy efficiency management. The market is mainly concerned about the company's overseas meter export situation. The bank is bullish on the company's overseas channel foundation and brand recognition, supporting the company's diversified businesses going global, opening up growth space.

CICC's main points are as follows:

Comprehensive technical capabilities, providing overall solutions for energy metering and energy efficiency management.

Wasion Holdings focuses on three major business scenarios: energy metering, power distribution, and energy storage, covering the full range of "cloud, network, edge" technologies. Compared with peers, its integrated competitiveness in "chip + IoT + digitalization" stands out. Taking energy metering as an example, wasion holdings is the only professional manufacturer in China that can simultaneously provide various advanced energy metering products, systems, and services for electricity, water, gas, and heat; it is also one of the few manufacturers that have the ability to provide digital solutions from chip design, data perception, edge computing at the bottom layer, to ensure fast data transmission and stable connection communication technology, and to provide users with software management. capabilities.

Accelerated overseas channels plus product diversification, broad growth space.

The company has been deeply cultivating overseas for many years, leading in local layout, with four major overseas production bases in Brazil, Tanzania, Mexico, and Hungary. From 2019 to 2023, the company's overseas revenue CAGR reached 66%, and in the first half of 2024, overseas revenue accounted for 28%. Looking ahead, at the industry level, the bank is bullish on the upgrading space of emerging market power infrastructure. At the company level, the bank is bullish on the company's advantages in technology, brand, performance accumulation, cost-effectiveness, and diversified strategic thinking: 1) at the channel end, the existing base expands its reach to neighboring countries and actively prepares for new production capacity construction (Saudi Arabia, Indonesia); 2) at the product end, expanding from electricity metering to electrical IoT, urban IoT, power distribution equipment, energy storage, and other diverse business scenarios.

Both domestic and overseas markets are working together.

The bank expects that under the replacement cycle and technological iteration drive, the annual average tender volume of State Grid for electricity meters will be at a high level of 8,000 to 90 million between 2024 and 2028. Meanwhile, the company will strengthen its efforts to expand into external markets such as communication and industrial and commercial electricity, and the domestic electric AMI business is expected to remain steady. Benefiting from the accelerated application of dual-mode technology in areas such as power metering and power distribution zones, the domestic communication and fluid AMI business will also maintain rapid growth. At the domestic ADO business level, the bank is optimistic about business opportunities in the datacenter field for non-network end, as the company has industry giants like Alibaba and ByteDance as clients.

Potential catalysts: Acceleration in overseas production capacity and order fulfillment, domestic electric meter bids exceeding expectations.