EAGLERISE(CHINA)(SZ:002922) HUAXI Securities·2024-07-07 07:02Investment Rating - The report initiates coverage with an "Accumulate" rating for the company, considering its future development prospects [5][42][48]. Core Viewpoints - The overseas transformer market is expected to see increasing demand, and the company has advantages in gaining alpha returns from its extensive overseas market experience and active capacity expansion [5][41]. - The company has set ambitious performance targets in its stock incentive plans for 2023-2026, reflecting strong confidence in long-term growth [10][25][46]. - The energy products segment is identified as a key driver of revenue growth, with a significant contribution from transformer products [28][33][68]. Summary by Relevant Sections Performance Forecast and Valuation - The company is projected to achieve revenues of 45.04 billion, 56.44 billion, and 70.70 billion yuan for 2024-2026, with year-on-year growth rates of 24.10%, 25.30%, and 25.30% respectively. Net profits attributable to shareholders are expected to be 3.58 billion, 4.61 billion, and 5.85 billion yuan, with growth rates of 71.3%, 28.6%, and 27.0% respectively [5][42][50]. Capacity and Product Development - The company has expanded its domestic production capacity in Jiangxi and is planning new capacities to meet long-term market demand. It has also established a new production line in the U.S., expected to begin trial production in Q4 2024 [8][11][66]. - The company has a diverse range of transformer products, including photovoltaic step-up transformers, distribution transformers, and box-type substations, with ongoing expansion in both domestic and international markets [30][33][59]. Overseas Market Expansion - The company has a strong foundation in overseas market development, having established subsidiaries in Germany, the U.S., and Japan since 2007. It has also made significant acquisitions to enhance its market presence [11][37][64]. - The overseas revenue has shown steady growth, increasing from 5.62 billion to 9.81 billion yuan from 2019 to 2023, with a compound annual growth rate (CAGR) of 14.9% [64][66]. Stock Incentive Plans - The company has implemented stock incentive plans for three consecutive years, with performance targets set to ensure alignment with long-term growth objectives. The targets include revenue growth rates of no less than 25%, 50%, and 80% for 2024-2026 [25][46][56].