JSSMDL(SH:603530) Huaxin Securities·2024-09-02 05:30Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1][4]. Core Insights - The company, Shenma Electric (603530.SH), is a leading player in composite external insulation, actively expanding into international markets. In the first half of 2024, it achieved revenue of 551 million yuan, a year-on-year increase of 32.67%, and a net profit attributable to shareholders of 141 million yuan, up 177.52% year-on-year [1][3]. Summary by Sections Company Performance - In 2024H1, the company reported revenue of 551 million yuan, a 32.67% increase year-on-year, and a net profit of 141 million yuan, reflecting a 177.52% growth year-on-year. The gross margin improved to 47.28%, up 12.74 percentage points year-on-year, while the net margin reached 25.58%, an increase of 13.35 percentage points year-on-year [1][3]. International Market Expansion - The company has seen rapid growth in overseas revenue, with exports accounting for over 50% of total sales in 2023. The composite external insulation products for substations have established solid partnerships with major international players like Hitachi Energy, Siemens, and GE. In 2024H1, overseas contract revenue for transmission composite external insulation products reached 42.95 million yuan, a 152% increase year-on-year, with the Latin American market growing by 213% [1][3]. High Voltage Market Potential - The company holds a dominant position in the domestic high voltage market, supplying over 80% of the composite insulators used in China's high voltage stations. With the commencement of new high voltage projects under the 14th Five-Year Plan, the company is expected to see significant revenue growth from this segment [3][4]. Financial Forecast - The company is projected to achieve revenues of 1.309 billion yuan, 1.819 billion yuan, and 2.423 billion yuan for the years 2024, 2025, and 2026, respectively. The earnings per share (EPS) are forecasted to be 0.75 yuan, 1.04 yuan, and 1.40 yuan for the same years. The current stock price corresponds to price-to-earnings (PE) ratios of 28.6, 20.6, and 15.4 times for 2024, 2025, and 2026, respectively [4][6].