szclou(002121) 华创证券·2024-09-04 13:09Investment Rating - The report downgrades the investment rating of Kelu Electronics (002121) to "Recommend" with a target price of 4.1 RMB [1] Core Views - Kelu Electronics' profitability is significantly impacted by historical asset burdens, despite strong performance in its dual main businesses of smart grid and energy storage [1] - The company's 2024 H1 revenue reached 1.911 billion RMB, a YoY increase of 22.39%, but it reported a net loss of 40 million RMB [1] - Credit impairment losses and foreign exchange losses from Egyptian Pound assets have substantially affected the company's financial performance [1] Financial Performance - In 2024 H1, Kelu Electronics recorded credit impairment losses of 64 million RMB, including 31 million RMB from accounts receivable and 35 million RMB from other receivables [1] - The company's financial expenses decreased by 49.21% YoY to 64 million RMB, primarily due to reduced interest expenses after Midea's investment [1] - However, the Egyptian subsidiary incurred a foreign exchange loss of 97 million RMB due to the depreciation of the Egyptian Pound [1] Subsidiary Performance - Key loss-making subsidiaries include the Egyptian subsidiary (-111 million RMB), Shenzhen Kelu New Energy Technology (-54 million RMB), and Shenzhen Che Dian Network (-43 million RMB) [1] - The company is accelerating the disposal of underperforming assets, with partial disposal of Shenzhen Chuangxiang Lvyuan New Energy Vehicle Development already completed [1] Business Segments - Smart grid business generated 1.381 billion RMB in revenue in 2024 H1, a YoY increase of 3.45%, with a gross margin of 32.93% [1] - The energy storage business secured significant overseas orders, including a 480MWh system order and two additional orders totaling 1.22GWh [1] - The company is leveraging Midea Group's global sales channels to expand its overseas energy storage business [1] Financial Projections - The report forecasts Kelu Electronics' net profit for 2024-2026 to be -6 million RMB, 150 million RMB, and 241 million RMB respectively [1] - Revenue is expected to grow from 4.547 billion RMB in 2024 to 5.786 billion RMB in 2026, with a CAGR of 8.3%-16.7% [2] - The company's gross margin is projected to remain stable at around 31% from 2024 to 2026 [5] Valuation - The report applies a PS valuation of 1.5x, considering the company's asset burden, compared to the industry average of 2.2x [1] - The target price of 4.1 RMB represents a 17.5% upside from the current price of 3.49 RMB [3]