东方电子：电网二次设备老牌企业，配网与数智化带来新机遇

Investment Rating - The report gives an "Outperform" rating to Oriental Electronics (000682 SZ) [1][5] Core Views - Oriental Electronics is a veteran player in power grid secondary equipment with leading overseas business layout [1] - The company has formed six major business segments covering the entire power system [1] - Distribution network investment is expected to enter a new boom cycle driven by multiple factors [1] - The company has a complete product line for distribution network equipment and is leading in digital transformation [2] - Oriental Electronics is deeply involved in the digital transformation of State Grid and China Southern Power Grid [2] - The company is expected to achieve net profits of 667/831/1029 million yuan from 2024 to 2026 [3] Business Overview - The company covers all aspects of power systems with products exported to over 50 countries [12] - Overseas revenue accounted for 8% in H1 2024 with gross margin reaching 32% [16] - The company has six major industrial directions including power dispatching, transmission and distribution automation [15] - WeisiDun, a subsidiary, contributes over 50% of net profit with revenue reaching 995 million yuan in H1 2024 [26] - Haiyi Software, another subsidiary, focuses on digital business with revenue growing at 13% CAGR from 2019-2023 [29] Industry Analysis - Distributed energy development is reshaping distribution network infrastructure [48] - China's distributed PV installed capacity reached 310GW by June 2024 [49] - Charging infrastructure development is increasing peak regulation pressure on distribution networks [51] - Commercial and industrial energy storage is growing rapidly with 4 77GWh new installations in 2023 [54] - China's distribution network investment reached 311 7 billion yuan in 2023 [58] - The transformer replacement market is estimated to exceed 300 billion yuan [62] Competitive Advantages - The company has complete product lines for distribution network equipment [24] - Oriental Electronics ranks top 3 in State Grid's distribution terminal bidding [65] - The company has launched new products for digital transformation of distribution networks [68] - It is a major supplier of next-generation dispatching systems for both State Grid and China Southern Power Grid [74]