HPEC(SH:600312) Huaan Securities·2024-07-08 13:00Investment Rating - The investment rating for Pinggao Electric (600312) is "Buy" (首次) [2] Core Views - Pinggao Electric is a leading enterprise in the high-voltage switchgear sector, benefiting from the accelerated construction of ultra-high voltage projects [2][22] - The company's revenue has begun to recover, with significant growth in its core business profitability [12][14] - The demand for ultra-high voltage infrastructure is expected to grow significantly, driven by increased investment in the power grid and the need for renewable energy integration [19][21] Summary by Sections 1. Established High-Voltage Switch Manufacturer - Pinggao Electric has a rich history and is a key player in the high-voltage switchgear industry, having been established in 1970 [7] - The company has developed a strong competitive advantage through years of management and innovation, mastering the technology for a full range of switch products [9] 2. Accelerated Ultra-High Voltage Construction - The investment scale in the power grid is expected to maintain high growth, with ultra-high voltage being a key investment direction [16] - The total investment in the power grid during the "14th Five-Year Plan" period is projected to exceed 3 trillion RMB, with significant contributions from both the State Grid and Southern Power Grid [16][19] - Pinggao Electric is positioned to benefit directly from the growth in ultra-high voltage construction, as its products are essential for power system control and protection [22][25] 3. International Business Turnaround - The company has achieved significant growth in its international business, with revenue reaching 720 million RMB in 2023, a year-on-year increase of 261% [26] - Pinggao Electric's products have been successfully marketed to over 70 countries and regions, establishing a robust overseas marketing network [29][31] - The company is expected to gain substantial benefits from the demand for power grid construction driven by the Belt and Road Initiative [29] Financial Forecast - The projected net profit for Pinggao Electric is expected to be 1.122 billion RMB in 2024, 1.415 billion RMB in 2025, and 1.705 billion RMB in 2026, with corresponding P/E ratios of 24, 19, and 16 times [32]