Baosight(SH:600845) KAIYUAN SECURITIES·2024-07-31 01:00Investment Rating - The investment rating for the company is "Buy" (maintained) [2][3] Core Views - The report emphasizes strong government support for state-owned enterprises (SOEs) in terms of independent control and equipment upgrades, which is expected to significantly boost demand for the company's domestic intelligent manufacturing products. The projected net profits for 2024-2026 are estimated at 30.7 billion, 40.1 billion, and 52.9 billion yuan respectively, with corresponding P/E ratios of 29.9, 22.9, and 17.3 times [3][4] Summary by Sections Policy Insights - Recent central government documents and discussions have strongly advocated for SOEs to develop technological innovation and overcome critical technology bottlenecks. Policies such as fiscal subsidies for equipment upgrades and significant funding for SOE equipment updates are expected to drive demand for the company's products [3] Client Developments - The company’s self-developed large PLC has helped Hongwang Group enter the 2024 Fortune China 500 list with annual revenue of 7.77 billion USD, ranking 313th. The successful implementation of the PLC in Hongwang's operations demonstrates the strength of the company's domestic products [4] Industry Trends - Xinjie Electric reported a 26.67% year-on-year increase in PLC revenue for H1 2024, with a gross margin of 56.71%. This indicates a recovery in the industrial control supply chain. The company is positioned as a leading domestic large PLC provider, with a significant market opportunity as it transitions from a 0% to a 1% market share [5] Financial Projections - The company’s projected financials include: - Revenue: 14.08 billion yuan in 2024, growing to 20.38 billion yuan by 2026 - Net profit: 3.07 billion yuan in 2024, increasing to 5.29 billion yuan by 2026 - Gross margin expected to rise from 38.3% in 2024 to 43.3% in 2026 [6][9]