EAGLERISE(CHINA)(002922) 海通国际·2024-10-14 08:03Investment Rating - The report initiates coverage on Eaglerise Electric & Electronic with an OUTPERFORM rating, setting a target price of RMB 24.33, compared to the current price of RMB 18.99 [2] - The HTI ESG score for the company is 4.3-4.3-4.0, indicating strong environmental, social, and governance practices [2] Core Investment Thesis - Eaglerise has been deeply cultivating the new energy industry for 25 years, with its overseas layout opening significant growth opportunities [5] - The company's revenue is expected to grow from RMB 3.63 billion in 2023 to RMB 6.93 billion in 2026, with net profit increasing from RMB 209 million to RMB 576 million over the same period [4] - The company's energy products, particularly photovoltaic step-up transformers and magnetic components, are benefiting from the high growth in the global new energy sector [7] Revenue and Profit Growth - Revenue growth is projected at 29% in 2023, 26% in 2024, 24% in 2025, and 21% in 2026, driven by strong demand in the new energy sector [4] - Net profit growth is expected to be 9% in 2023, 70% in 2024, 32% in 2025, and 22% in 2026, reflecting improving margins and operational efficiency [4] - The company's gross profit margin (GPM) is forecasted to increase from 22.3% in 2023 to 23.7% in 2024, before stabilizing around 22.9% by 2026 [4] Overseas Expansion - Eaglerise has been expanding its overseas presence, with overseas revenue accounting for 27% of total revenue in 2023 [10] - The company has established production bases in Malaysia, Thailand, the US, and Mexico, with further growth expected in overseas markets starting from 2024 [10] New Energy Products - The company's main new energy products include photovoltaic step-up transformers and magnetic components, which are expected to benefit from the global photovoltaic market growth [7] - Global photovoltaic installed capacity is projected to reach 430GW in 2024, with China's new installed capacity expected to exceed 220GW, driven by strong demand [21] Energy Storage and Charging Pile Business - Eaglerise is expanding into energy storage and charging pile businesses, targeting industrial and commercial energy storage and large-scale energy storage power stations [8] - The global energy storage market is expected to grow significantly, with new installed capacity reaching 64.62GW in 2024 under conservative estimates and 75.71GW under optimistic scenarios [8] Lighting Industry - The company's lighting products, including LED drivers and lighting fixtures, are benefiting from the global shift towards energy-efficient lighting solutions [26] - The LED lighting market in China is expected to grow at a CAGR of 12.4% from 2022 to 2028, reaching RMB 460 billion by 2028 [27] Valuation and Financial Projections - Based on the DCF model, the target price for Eaglerise is set at RMB 24.33, with a projected revenue of RMB 45.9 billion in 2024, RMB 57.1 billion in 2025, and RMB 69.3 billion in 2026 [8] - The company's ROE is expected to improve from 8.6% in 2023 to 15.1% in 2026, reflecting stronger profitability and operational efficiency [4] Product Portfolio and Strategy - Eaglerise operates under a "2+X" strategy, focusing on energy products and lighting products, while also expanding into new areas such as energy storage, charging piles, and automotive power supplies [11] - The company's product portfolio includes photovoltaic transformers, industrial control transformers, and LED lighting products, with a strong focus on innovation and market expansion [12]