SIEYUAN(SZ:002028) Tianfeng Securities·2024-09-24 00:08Investment Rating - The report initiates coverage with a "Hold" rating for the company, setting a target price of 65.74 CNY [4]. Core Insights - The company is a leading player in the power equipment sector, actively expanding both domestic and international markets. It has a comprehensive range of power transmission and distribution equipment, including primary and secondary devices, and has been increasing its overseas orders significantly [1][2]. - The company is expected to benefit from the global transition to renewable energy, which will drive investment in power transmission and distribution, thereby increasing demand for related equipment. The company’s market share is anticipated to grow, particularly in ultra-high voltage products [2][20]. Company Overview - Established in 1993, the company specializes in the research, manufacturing, and engineering services of power technology. Its product range includes ultra-high voltage and high-voltage switchgear, transformers, relay protection systems, and energy storage solutions [11][12]. - The company has been actively expanding its overseas market since 2009, with significant growth in overseas orders, reaching 40.1 billion CNY in 2023, a year-on-year increase of 34% [1][15]. Financial Performance - The company’s revenue from 2020 to 2023 showed consistent growth, with figures of 73.73 billion CNY, 86.95 billion CNY, 105.37 billion CNY, and 124.60 billion CNY, reflecting year-on-year growth rates of 15.6%, 17.9%, 21.2%, and 18.2% respectively [20][23]. - The net profit for the same period was 9.33 billion CNY, 11.98 billion CNY, 12.20 billion CNY, and 15.59 billion CNY, with year-on-year growth rates of 67.4%, 28.3%, 1.9%, and 27.7% respectively [20][33]. Business Segments - The main revenue sources include switchgear and related products, which accounted for 44.8% of total revenue in 2023, followed by coil products (22.0%), reactive power compensation products (14.8%), and smart devices (8.1%) [23][24]. - The company has also ventured into new business areas such as supercapacitors, which are expected to open new revenue streams, particularly in the automotive and industrial automation sectors [1][21]. Market Outlook - The domestic market is projected to enter a peak period for ultra-high voltage project operations from 2024 to 2025, which is expected to drive demand for the company’s transmission and distribution products [1][20]. - Globally, major economies are accelerating investments in power grids, with cross-border grid interconnections becoming a significant trend, which is likely to sustain growth in power equipment investments [1][20].