SANXING(601567) HTSC·2024-10-18 13:03Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 43.90 [1]. Core Views - The company is a dual leader in the smart power distribution and medical services sectors, with significant growth potential in both areas. The overseas market for electric meters presents vast opportunities, while the medical segment is expected to achieve steady expansion [2][15]. - The forecasted net profits for the company from 2024 to 2026 are RMB 23.37 billion, RMB 29.21 billion, and RMB 36.38 billion respectively, with a projected CAGR of over 25% for the medical services segment [2][5]. Summary by Sections Smart Power Distribution - The domestic power grid investment is expected to enter a new upward cycle, with a focus on distribution networks. The company has maintained a leading market share in distribution transformers and is actively expanding its customer base beyond the grid sector [3][15]. - The overseas electric meter business is anticipated to grow significantly, with a projected CAGR of over 20% from 2024 to 2026, driven by new market expansions in regions such as Mexico, Western Europe, and Africa [4][15]. Medical Services - The demand for rehabilitation medical services is driven by an aging population and increasing healthcare spending. The company has accelerated its expansion in the medical sector since 2021, with a focus on establishing a chain of rehabilitation hospitals [5][15]. - As of the first half of 2024, the company operates 34 hospitals, including 28 rehabilitation hospitals, and expects the medical segment to achieve a CAGR of over 25% from 2024 to 2026 [5][15]. Financial Performance - The company reported a revenue of RMB 11.46 billion in 2023, a year-on-year increase of 25.99%, and a net profit of RMB 1.90 billion, reflecting a 100.79% increase. The first half of 2024 showed continued growth with revenues of RMB 6.99 billion, up 26.11% year-on-year [6][34]. - The operating cash flow aligns closely with net profits, and the company maintains a high dividend payout ratio, averaging over 47% from 2020 to 2023 [34].