Dongfang Electronics(SZ:000682) Guotai Junan Securities·2024-06-30 23:32Investment Rating - The report initiates coverage with a "Buy" rating for the company, indicating a positive outlook on its future performance [27][43]. Core Insights - The company is positioned as a leader in the power distribution network sector, benefiting from accelerated investment in the power grid. Revenue projections for 2024-2026 are estimated at 80.94 billion, 98.74 billion, and 118.71 billion yuan, with growth rates of 24.9%, 22.0%, and 20.2% respectively. Net profit forecasts for the same period are 6.96 billion, 8.67 billion, and 10.57 billion yuan, with growth rates of 28.5%, 24.6%, and 22.0% respectively [28][43]. - The company has a diversified and systematic business layout across the entire power system industry chain, integrating traditional businesses in power grid, IoT, and energy conservation [38][43]. - The digital transformation of the power grid is a key trend, with the company actively participating in the development of smart distribution networks, which are expected to enhance operational efficiency and safety [23][43]. Summary by Sections Financial Forecasts - The company’s revenue is projected to grow significantly, with estimates of 6,478 million yuan in 2023, 8,094 million yuan in 2024, and continuing to rise to 11,871 million yuan by 2026. The corresponding net profits are expected to be 541 million yuan in 2023, 696 million yuan in 2024, and reaching 1,057 million yuan by 2026 [28][35]. - The earnings per share (EPS) are forecasted to be 0.40 yuan in 2023, 0.52 yuan in 2024, and 0.79 yuan in 2026 [28][35]. Business Segments - The company’s revenue from the power transmission and transformation automation business is expected to grow at rates of 15%, 10%, and 5% from 2024 to 2026, respectively [2]. - The comprehensive energy and virtual power plant business is projected to grow at approximately 16% annually, while the new energy and storage business is expected to see explosive growth, with rates of 162.36%, 100%, and 50% from 2024 to 2026 [3][36]. Market Position and Strategy - The company has established a robust presence in the smart grid and energy management sectors, supported by government initiatives and a strong management team [40][41]. - The digital transformation strategy, termed "Digital Oriental," aims to enhance the integration of various energy resources and improve service quality, thereby creating greater value for stakeholders [38][43].