XJEC(000400) 民生证券·2024-08-31 14:30Investment Rating - The report maintains a "Recommend" rating for XJ Electric (000400 SZ) [2][3] Core Views - XJ Electric's 24H1 revenue was RMB 6 836 billion, down 5 10% YoY, while net profit attributable to parent company increased by 10 35% YoY to RMB 628 million [2] - In 24Q2, revenue grew 3 38% YoY to RMB 4 026 billion, but net profit attributable to parent company declined 4 26% YoY to RMB 391 million [2] - The company's gross margin improved by 2 17pcts to 20 90% in 24H1, and net margin increased by 1 50pcts to 10 58% [2] - Revenue from smart metering grew 9 90% YoY, while new energy and system integration revenue declined 29 74% YoY [2] - The company is expected to achieve revenue of RMB 20 073 billion, RMB 24 351 billion, and RMB 28 830 billion in 2024-2026, with YoY growth rates of 17 7%, 21 3%, and 18 4% respectively [2] - Net profit attributable to parent company is forecasted to be RMB 1 197 billion, RMB 1 763 billion, and RMB 2 288 billion in 2024-2026, with YoY growth rates of 19 0%, 47 3%, and 29 7% respectively [2] Financial Performance - In 24H1, the company's operating income was RMB 6 836 billion, down 5 10% YoY, while net profit attributable to parent company increased by 10 35% YoY to RMB 628 million [2] - The company's gross margin improved by 2 17pcts to 20 90% in 24H1, and net margin increased by 1 50pcts to 10 58% [2] - Revenue from smart metering grew 9 90% YoY, while new energy and system integration revenue declined 29 74% YoY [2] - The company's 24-26E revenue is forecasted to be RMB 20 073 billion, RMB 24 351 billion, and RMB 28 830 billion, with YoY growth rates of 17 7%, 21 3%, and 18 4% respectively [2] - Net profit attributable to parent company is forecasted to be RMB 1 197 billion, RMB 1 763 billion, and RMB 2 288 billion in 2024-2026, with YoY growth rates of 19 0%, 47 3%, and 29 7% respectively [2] Market Expansion - The company won a RMB 179 million bid for the converter valve in the Qinghai-Tibet Phase II expansion project [2] - It achieved a breakthrough in the southern power grid market with digital substation monitoring terminals and transmission line monitoring devices [2] - The company completed demonstration projects such as the Jiangxi Yingtan Zero-Carbon Substation and Hebei Shijiazhuang Substation Energy Storage [2] Operational Efficiency - The company implemented the "Three Calculations and Three Comparisons" plan for orders, improving gross margin by 1 86pcts YoY in 24H1 [2] - It strengthened performance evaluation, setting differentiated indicators to drive value creation [2] Valuation - The company's 24-26E PE ratios are 24X, 17X, and 13X respectively [2] - The current price is RMB 28 60 as of August 30, 2024 [3]