XJEC(SZ:000400) Guohai Securities·2024-09-02 07:11Investment Rating - The report maintains a "Buy" rating for the company [1][6] Core Views - The company is expected to benefit from the release of flexible DC demand, with a robust performance in its business segments [4][5] - The company is a leading player in flexible DC transmission, with anticipated growth in revenue and profit over the next few years [4][5] Financial Performance Summary - For H1 2024, the company achieved revenue of 6.8 billion yuan, a year-on-year decrease of 5%, while net profit attributable to shareholders was 630 million yuan, an increase of 10% [3] - In Q2 2024, revenue reached 4.03 billion yuan, a quarter-on-quarter increase of 43% and a year-on-year increase of 3% [3] - The gross profit margin for H1 2024 was 20.9%, up 1.9 percentage points year-on-year, and the net profit margin was 10.6%, up 1.5 percentage points year-on-year [3] Business Segment Performance - The smart distribution and transformation system generated revenue of 2.12 billion yuan, down 2% year-on-year, with a gross margin of 23.1% [5] - The smart meter segment saw revenue of 1.6 billion yuan, up 10% year-on-year, with a gross margin of 27.6% [5] - The direct current transmission system reported revenue of 150 million yuan, down 42% year-on-year, but with a high gross margin of 51.5% [5] Future Earnings Forecast - Revenue projections for 2024-2026 are 18.5 billion, 20.6 billion, and 23.3 billion yuan, with year-on-year growth rates of 8%, 12%, and 13% respectively [4][7] - Net profit forecasts for the same period are 1.29 billion, 1.70 billion, and 2.09 billion yuan, with growth rates of 28%, 31%, and 23% respectively [4][7] - The current stock price corresponds to a price-to-earnings ratio (P/E) of 23X for 2024, 17X for 2025, and 14X for 2026 [4][7]