XJEC(000400) 东吴证券·2024-09-05 07:00Investment Rating - The report maintains a "Buy" rating for XJ Electric (许继电气) [1][3] Core Views - The company is expected to accelerate revenue in the second half of the year as high-voltage projects begin to be delivered, with a projected annual revenue of over 900 million yuan [2][14] - The domestic grid business shows steady growth, with significant cost reduction and efficiency improvements [2][15] - The company has increased its mid-term dividend payout to approximately 30%, enhancing shareholder returns [2][15] Summary by Sections Revenue and Profit Forecast - Total revenue for 2022 was 15,030 million yuan, with a projected increase to 17,061 million yuan in 2023, and expected to reach 25,940 million yuan by 2026, reflecting a compound annual growth rate (CAGR) of 15.14% [1][19] - The net profit attributable to shareholders is forecasted to grow from 785.26 million yuan in 2022 to 1,978.69 million yuan by 2026, with a CAGR of 22.36% [1][19] - The earnings per share (EPS) is expected to rise from 0.77 yuan in 2022 to 1.94 yuan in 2026 [1][19] Business Performance - In the first half of 2024, the company's revenue was 6.84 billion yuan, a decrease of 5.1% year-on-year, while the net profit was 630 million yuan, an increase of 10.3% year-on-year [7][18] - The gross margin for the first half of 2024 was 20.9%, up 2.2 percentage points year-on-year [7][18] Market and Industry Outlook - The report highlights that the national grid investment is expected to exceed 600 billion yuan in 2024, indicating a robust growth trajectory for the industry [9][10] - The company is well-positioned to benefit from the increasing penetration of flexible high-voltage direct current (HVDC) technology, with expectations of over 50% penetration by 2025 [2][14] Financial Metrics - The current price-to-earnings (P/E) ratio is 30.52, projected to decrease to 15.52 by 2026, indicating an attractive valuation as earnings grow [1][19] - The company’s return on equity (ROE) is expected to improve from 9.39% in 2023 to 12.91% by 2026 [20][19]