Investment events
1) In 2023, the company achieved revenue of 1,009 billion yuan, up 57.80% year on year; net profit to mother was 103 million yuan, up 131.26% year on year; net profit after deducting non-return to mother was 84 million yuan, up 170.46% year on year.
2) In the first quarter of 2024, the company's revenue was 178 million yuan, up 50.17% year on year, and net profit to mother was 7.69 million yuan, down 51.21% year on year, mainly due to the high base of 13 million government subsidies in the first quarter of 2023; net profit without return to mother was 6.84 million yuan in the first quarter of 2024, up 60.72% year on year.
Key points of investment
Continuously iterating high-performance and cost-effective charging module products and continuing to explore overseas markets in 2023, the company's NEV business achieved revenue of 686 million yuan, accounting for 68.05% of revenue. Among them, charging and switching charging power supplies achieved revenue of 651 million yuan, an increase of 109.60% over the previous year. Mainly, global NEV sales continued to grow, and charging pile construction accelerated. The company focuses on charging modules, continuously increasing the development and iteration of mainstream charging module products, strengthening the first-mover advantage of the 20kW State Grid “six unified” high-voltage fast charging products, first introducing double-sided gluing for all products, launching a 30kW charging module using silicon carbide components, and pioneering a 30kW low noise and low reactive power consumption charging module in the industry. The product is more reliable, lower noise, higher power density and efficiency. In response to high-end demand, the company will launch a ninth-generation 40kW charging module, using silicon carbide devices to reduce noise while improving product efficiency; The 40kW liquid-cooled charging module provides strong support for the overcharging scheme of the full liquid cooling architecture. We continue to step up our overseas market development efforts and carry out product research and development for overseas standards. Many products have obtained CE and UL certifications and entered the European and North American markets, and overseas progress is accelerating.
Deeply involved in the power supply industry for 20 years, focusing on providing customized services to major customers, the company's power business achieved revenue of 177 million yuan in 2023, up 36.93% year on year, with sales volume of 135,200 units, up 47.44% year on year. The main reason is the continuous increase in sales revenue for power operating power supplies. In recent years, investment in power grid infrastructure, especially high-voltage line construction, has been strengthened. The country plans and construction of UHV projects during the “14th Five-Year Plan” period, with a total investment of nearly 380 billion yuan. The planning and construction of the South Grid distribution network reached 320 billion yuan. The market share of the company's power operating power supply is based on the development trend of primary and secondary integration equipment and digitalization of power distribution. The company conducts targeted product development and launched power management modules for automated distribution terminals around core customer needs, which are mainly used in power supply control systems such as DTU, FTU, TTU, concentrators, etc. of the State Grid and South Grid, and has been in a leading position in the industry for a long time.
One of the main aerospace power supply suppliers, the military power supply module localization company continues to promote the development and industrialization of Howey Power's low-power DC DC power modules, high-power DC DC power modules, three-phase power factor correction modules, and multi-function localized special power supplies, expanding the company's business coverage and strengthening penetration, while actively developing aerospace special equipment testing services to provide customers with richer products, services and overall solutions to further consolidate and enhance the company's market competitiveness in the aerospace special field.
Profit forecasting and valuation
Maintain profit forecasts and maintain a “buy” rating. The company is a leading domestic charging module company, and the acceleration of overseas market layout opens up room for long-term growth. We maintain our 24-25 profit forecast. We expect net profit to be 1.64 million yuan and 267 million yuan for 24-25, and the net profit forecast for the additional 26 years is 377 million yuan, corresponding EPS is 0.94, 1.54, and 2.17 yuan/share. The PE corresponding to the current stock price is 18, 11, and 8 times, respectively. Maintain a “buy” rating.
Risk warning
Risk of macroeconomic and industry fluctuations and policy changes; risk of fluctuations in raw material prices; increased risk of market competition.