The company issued an announcement: 1) the company jointly signed a capital increase agreement with Ningde Zhixian, Shanghai Junfeng, Ningde Times, Shanghai Yunxin and Shanghai Tuomin, intending to invest 200 million yuan in cash to subscribe for 1.568628 million yuan of new registered capital of Ningde Zhixiang. The excess part is included in the target company's capital reserve; 2) the company and Ningde Zhiheng have signed a cooperation framework agreement on joint research and development and procurement of new generation intelligent switchboard products.
Heavy cooperation landed, and the company cut into the field of two rounds of power exchange. Ningde Zhihuan is jointly funded by Ningde Times and Ant Financial Services Group in 2019, which is mainly engaged in the power exchange service of two-wheeled scooters and is the carrier of "Hello power exchange service" located in the basic energy network of two-wheeled electric vehicles. The company has won the priority of purchasing the new generation intelligent switchboard and the priority of cooperative development of products and services related to the energy Internet and the new generation intelligent switchboard project under the same conditions. with this cooperation, the company successfully cut into the field of two rounds of power exchange, and further deepened the business layout in the new energy industry.
The space for power exchange service is broad, and the change cabinet business is expected to support the performance growth rate to continue to exceed expectations. The power exchange service can solve the high-frequency and long-time electricity needs of B-end users, such as shared rickshaws and real-time distribution personnel, and has better flexibility and security when the cost is close. the advantages of time-saving and high security are expected to promote the penetration of C-end users, and there is a broad space for domestic power exchange service. Considering the development prospect of Hello Travel in the field of shared scooters and the potential space of the switchboard industry, the performance flexibility brought by the company's new business is expected to continue to exceed expectations in the next few years.
The demand for 5G base station power supply broke out, and the company's share and orders exceeded expectations. As an important part of the new infrastructure, the number of 5G base stations is expected to exceed 700000 in 2020, giving rise to a broad demand for supporting power supply. On March 13, the company won 40% of the bid for "China Mobile Limited 2020-2021 combined switching Power supply", ranking first, highlighting the company's dominant position in the field of 5G base station power supply. According to the interactive easy platform information, as of March 24, the company's new orders for communication power products in the first quarter have exceeded the whole of last year, and the order size in 2020 is expected to continue to exceed expectations, supporting a high performance increase in 2020.
The pace of IDC demand is greatly advanced, the company binds leading customers such as BAT, and new Panamanian products are expected to contribute to the increase. Under the influence of "new infrastructure" and epidemic factors, the demand for power supply system in data centers is expected to break out.
The company is the leader of HVDC in China, cooperating deeply with core customers such as BAT and Dataport. According to the information of Interactive easy platform, the order of IDC power supply system in the first quarter of the company has reached half of last year. In 2019, the company and BABA launched a new generation of data center power supply system (Panama system), the share is expected to further increase, will fully benefit from the outbreak of industry demand.
Investment suggestion: the company is the leader of 5G base station power supply and IDC power supply system, fully benefiting from the outbreak of demand for 5G base stations, IDC, charging piles and other links in the "new infrastructure". The company's performance fluctuated briefly due to the delay in the delivery pace in the first quarter, and the newly signed orders are much higher than expected to support the high growth for the whole year, and the second quarter is expected to enter the stage of high performance growth. This cooperation will help the company to cut into the field of power exchange of two-wheeled electric vehicles, which will bring new increments in performance. We estimate that the company's net profit from 2019 to 2021 will be RMB 0.78 million and RMB 0.33 million, respectively, and the EPS will be RMB 0.14, respectively. The closing price of PE on April 7, 2020 will be times that of 105-44-31, respectively, maintaining the overweight rating.
Risk hints: 5G base station construction is not as expected, IDC construction is not as expected, and power grid investment is not as expected.