EAGLERISE(CHINA)(SZ:002922) Minsheng Securities·2024-07-07 02:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 18.36 CNY per share [68]. Core Insights - The company has achieved significant revenue growth, with a compound annual growth rate (CAGR) of 27.2% in revenue and 38.2% in net profit from 2018 to 2023. In 2023, the company reported revenue of 3.63 billion CNY, a year-on-year increase of 28.7%, and a net profit of 209 million CNY, up 9.3% [66][32][50]. - The company is expanding its product offerings in the photovoltaic sector, particularly through high-frequency inductors and boost transformers, which have seen substantial demand growth [13][21][40]. - The company is also investing in overseas production capabilities, with a new factory planned in Mexico to cater to the North American market, addressing the supply-demand mismatch in transformers [68][110]. Summary by Sections Business Overview - The company has a diversified product portfolio, focusing on energy products and lighting, with a strategic "2+X" approach that includes vehicle power supplies and energy storage systems [81][55]. - In 2023, the company's revenue from new energy products reached 2.63 billion CNY, a 42% increase year-on-year, contributing to 72% of total revenue [99][66]. Financial Performance - The company has shown a strong recovery in profitability, with a gross margin of 22.3% and a net margin of 6.0% in 2023, reflecting a stable cost management strategy [38][32]. - The first quarter of 2024 saw continued growth, with revenue of 770 million CNY, up 21.1%, and net profit of 60 million CNY, a remarkable increase of 206.7% [32][66]. Market Position and Strategy - The company has successfully penetrated the inverter supply chain of leading manufacturers, leveraging its competitive advantages in reliability and cost control [19][13]. - The global market for photovoltaic transformers is projected to grow significantly, with expectations of reaching 7.3 billion USD by 2031, indicating a robust growth opportunity for the company [25][21]. Future Outlook - The company is expected to continue its growth trajectory, with projected revenues of 4.87 billion CNY in 2024, 6.35 billion CNY in 2025, and 8.20 billion CNY in 2026, reflecting growth rates of 34.0%, 30.5%, and 29.2% respectively [68][52]. - The planned expansion into the Mexican market is anticipated to enhance the company's ability to meet increasing demand in North America, particularly in light of aging infrastructure and the need for modernization [110][68].