performance

The company announced the 2024 third quarter report, achieving revenue of 10.407 billion yuan, YoY +21.28%; net profit attributable to mother of 1.491 billion yuan, YoY +29.88%; net profit deducted from mother of 1.405 billion yuan, YoY +26.52%; gross margin of 31.42%, +1.31pct year over year. Among them, 2024Q3 achieved revenue of 4.241 billion yuan, YoY +29.39%; realized net profit of 0.604 billion yuan, YoY +34.95%; realized net profit of 0.565 billion yuan, YoY +31.34%; gross margin was 30.96%, or -0.84/-1.58pct month-on-month, respectively.

Increased investment in GIS is expected to contribute to additional volume

According to the project investment announcement issued by the company on October 26, the company plans to invest in a “high-voltage intelligent integrated electrical (GIS) production base construction project”. The total planned investment of the project is 0.3 billion yuan, and the project construction period is 12 months. This investment is expected to support the company's business expansion in the high-voltage combined electrical market, meet production capacity requirements for future deliveries, and achieve new breakthroughs in sales revenue. The company has carried out 750kV market sales work and is expected to gain a certain market share in the future.

Investment advice

We expect revenue of 15.443/19.12/23.581 billion yuan for 24-26; net profit to mother of 2.105/2.53/2.979 billion yuan, respectively, corresponding to PE 29/24/21 times, respectively, maintaining a “buy” rating.

Risk warning

Market competition intensified; risk of exchange rate fluctuations; new products were not advancing as fast as expected.