Investment events

On July 21, 2024, the company issued an announcement regarding the signing of an overseas business contract by a subsidiary.

Key points of investment

An operating contract was signed with the Polish company PGE, and the overseas meter business continued to break through

According to the company's announcement, ELGAMA, a wholly-owned subsidiary of the company, and local partner ESMETRIC formed a consortium to participate in PGE's publicly tendered smart energy meter project. Recently, ELGAMA and its partner were confirmed as the winning bidder for this project. ELGAMA, its partners and PGE signed an operating contract for the above project. The total contract amount was 0.36 billion zloty, or approximately RMB 0.666 billion (tax included). PGE is one of the four Polish state-owned power companies and is the operator of the distribution system in the operating area specified in the distribution concession. PGE's business covers an area of 129,829 square kilometers (about 41% of the country's area). The delivery period for this project is 18 months. ELGAMA mainly provides smart electric energy meter products. Partners are responsible for technical support, some supporting products, coordination of warranty/warranty services, logistics and project management, and after-sales support. In this project contract, ELGAMA accounts for more than 85% of the contract amount, and the rest is the partner's share.

Smart meters are two-wheel drive at home and abroad, and are expected to benefit from the acceleration of digital investment in global power grids

The company continues to strengthen the domestic market layout, stabilize the bid share of China and South Network, and actively explore new markets, products, and new businesses. It has made breakthroughs in distribution networks, intelligent AI management units, rail meters, and Huawei projects. In 2023, the company won a total bid amount of about 0.626 billion yuan in the State Grid 2023 electricity meter (including electricity consumption information collection); in the China Southern Grid 2023 measurement product framework bidding project, the winning bid amount was about 0.299 billion yuan. Overseas, the company's products have covered more than 30 countries and regions around the world, seizing development opportunities in the overseas electricity distribution market, expanding market space with various partners around the world, and achieving rapid growth in overseas sales performance. Among them, the company cooperated with Rangel, a leading company in the global metering industry, to focus on expanding its market share in Western Europe and the Asia-Pacific region; through its wholly-owned subsidiary EGM, it obtained bid shares from several power authorities in the Polish market. All contracts were fulfilled and shipped within 2023, accounting for more than 30% of the market share.

Profit forecasting and valuation

Maintain profit forecasts and maintain a “buy” rating. The company's three business segments, smart meters, new energy, and energy storage, are being promoted collaboratively, and it is expected that they will continue to benefit from the construction of global power grids and new energy sources. We maintain the company's profit forecast. The company's net profit for 2024-2026 is 1.194, 1.381, and 1.58 billion yuan, respectively, and the corresponding EPS is 0.58, 0.67, and 0.77 yuan, respectively, and the corresponding PE is 11, 9, and 8 times, respectively.

Risk warning

Demand for PV installations fell short of expectations; market competition intensified; raw material prices fluctuated greatly.