HPEC(600312) Guoxin Securities·2024-10-27 08:11Investment Rating - The investment rating for the company is "Outperform the Market" [4][12][15] Core Views - The company has experienced rapid profit growth, with a net profit increase of 55% year-on-year in the first three quarters, driven by an optimized shipment structure that significantly improved gross margins [5][7] - The demand for the main grid remains strong, with expectations for increased demand for ultra-high voltage AC during the "14th Five-Year Plan" period [5][11] - The company is well-positioned in the distribution network market, benefiting from recent policies aimed at upgrading distribution networks, which are expected to lead to a favorable investment cycle [2][11] Financial Performance Summary - In the first three quarters, the company achieved revenue of 7.885 billion yuan, a year-on-year increase of 5.88%, and a net profit of 857 million yuan, a year-on-year increase of 55.13% [5][7] - The gross margin for the first three quarters was 24.27%, up 4.29 percentage points year-on-year, while the net margin was 11.69%, up 3.33 percentage points year-on-year [5][7] - For the third quarter alone, revenue was 2.843 billion yuan, a year-on-year increase of 8.42%, and net profit was 323 million yuan, a year-on-year increase of 47.72% [7][11] Earnings Forecast and Financial Metrics - The company is expected to achieve net profits of 1.194 billion yuan, 1.539 billion yuan, and 1.838 billion yuan for the years 2024, 2025, and 2026, respectively [2][11] - The projected price-to-earnings (PE) ratios for 2024, 2025, and 2026 are 21, 17, and 14 times, respectively [2][11] - The company's return on equity (ROE) is projected to increase from 8.4% in 2023 to 14.4% in 2026 [3][13]