HPEC(SH:600312) Guoxin Securities·2024-07-12 10:30Investment Rating - The report maintains an "Outperform" rating for the company [4]. Core Views - The company is a leading enterprise in the high-voltage switch industry, benefiting from the acceleration of global power grid construction [1][17]. - The company has shown significant improvement in profitability, with a net profit of 820 million yuan in 2023, a year-on-year increase of 284.5% [1][19]. - The high-voltage switch industry is entering a golden development period, with the company expected to benefit from the upcoming surge in investment in ultra-high voltage projects from 2024 to 2030 [1][19]. Summary by Relevant Sections Company Overview - The company, established over 50 years ago, is a major technical equipment pillar in the national power engineering industry and has a strong R&D capability [11][17]. - It specializes in the research, manufacturing, sales, installation, and maintenance of medium, high, ultra-high, and extra-high voltage direct current switchgear [1][11]. Financial Performance - The company's revenue for 2023 was 11.08 billion yuan, with a year-on-year growth of 19.4% [1][19]. - The forecast for net profit from 2024 to 2026 is 1.19 billion, 1.43 billion, and 1.73 billion yuan, respectively, with growth rates of 45.9%, 20.5%, and 20.5% [2][3]. Market Position and Growth Potential - The company ranks first in the combination electrical equipment sector, securing new orders worth 4.062 billion yuan in 2023 [1]. - The domestic ultra-high voltage engineering market is expected to enter a peak development phase, with significant projects approved and under construction [1][19]. Product Development and Innovation - The company has successfully developed several innovative products, including the world's first ±1000kV direct current pure SF6 gas-insulated wall bushing, breaking foreign monopolies [1][17]. - The company emphasizes technological innovation and has a strong capability in R&D, filling gaps in the domestic high-voltage switch market [1][17]. Valuation and Price Target - The reasonable stock valuation is estimated to be between 21.90 and 23.70 yuan, indicating a potential upside of 6% to 14% compared to the current stock price of 20.70 yuan [2][4].