GONGNIU(SH:603195) Yong Xing Zheng Quan·2024-09-12 02:00Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [2][3]. Core Insights - The company has established itself as a leader in the consumer electrical industry, focusing on three main business segments: electrical connections, smart electrical lighting, and new energy products. In 2023, the revenue from these segments was 7.4 billion, 7.9 billion, and 0.38 billion respectively, with year-on-year growth rates of 5%, 15%, and 149% [1][2]. - The innovative "delivery and sales" model has allowed the company to build a robust distribution network with over 1.1 million offline sales points, which has contributed to stable growth even during downturns in the real estate market [1][2]. - The electrical connection business serves as the foundation for the company's performance, while the smart electrical lighting segment shows significant growth potential. The company holds over 70% market share in the converter industry, with revenue from smart electrical lighting reaching 7.9 billion in 2023 [1][2][46]. - The new energy segment is expected to continue its rapid growth, with a year-on-year revenue increase of 149% in 2023, focusing on both consumer and business markets for charging stations and energy storage solutions [1][2][82]. Summary by Sections 1. Steady Growth Through Cycles - The company has maintained steady growth in revenue and net profit from 2016 to 2023, with compound annual growth rates (CAGR) of 16.6% and 15.6% respectively [36][37]. - The innovative "delivery and sales" model has created a strong channel barrier, with over 750,000 hardware sales points established across the country [32][36]. 2. Dominance in the Converter Industry - The electrical connection business generated 7.39 billion in revenue in 2023, accounting for 47% of total revenue, and the company has a market share exceeding 70% in the converter market [46][51]. - The growth in the converter segment is driven by product innovation and increased demand for electrical connection products due to the rising number of small appliances in households [51][54]. 3. Continuous Growth in Smart Electrical Lighting - The smart electrical lighting segment achieved revenue of 7.9 billion in 2023, reflecting a year-on-year growth of 15.37% [58]. - The company is focusing on developing a smart ecosystem centered around the "smart no-main-light" concept, which includes various smart home products [58][67]. 4. Expanding New Energy Business - The new energy segment is projected to grow significantly, with the company focusing on charging stations and energy storage solutions, having developed over 17,000 terminal points for sales [85][87]. - The company is also expanding its presence in the European market for home energy storage, capitalizing on the growing demand driven by energy transition strategies [87].