XJEC(SZ:000400) Huaxin Securities·2024-06-28 09:30Investment Rating - The report initiates coverage with a "Buy" investment rating for Xuji Electric (000400.SZ) [2][3] Core Insights - Xuji Electric is a leading supplier of ultra-high voltage direct current (UHVDC) core equipment, with flexible direct current (FDC) technology providing long-term growth potential [2][3] - The company's profitability across various segments continues to improve, with a significant year-on-year increase in net profit and gross margin [2][3] Financial Performance - In Q1 2024, the company achieved a revenue of 2.81 billion yuan and a net profit attributable to shareholders of 237 million yuan, representing a year-on-year growth of 47.39% [2] - The gross margin improved to 18.27%, an increase of 4.63 percentage points year-on-year, attributed to the reduction in low-margin business revenue and improvements across all segments [2] - The company forecasts revenues of 18.1 billion, 20.2 billion, and 22.4 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 1.20, 1.58, and 1.89 yuan [2][4] Business Segments - The company has established a comprehensive UHV business system, including UHVDC transmission, flexible DC transmission, and related services [2] - Recent project wins include significant contracts for UHVDC equipment in both domestic and international markets, indicating strong demand for its products [2][3] Growth Opportunities - The development of offshore wind power projects and the company's involvement in flexible direct current projects are expected to open up long-term growth avenues [2][3]