Dongfang Electronics(000682) Guoxin Securities·2024-11-14 09:40Investment Rating - The report gives the company an "Outperform" rating for the first time [5]. Core Views - The company is a leading player in the domestic power automation sector, with a comprehensive product line covering all aspects of the power system [12][24]. - The company is well-positioned to benefit from the upcoming investment cycle in distribution networks, with transformers and switches expected to be key areas of focus for upgrades [1][2]. - The company has a strong overseas business presence, with products exported to various regions including Southeast Asia, South Asia, and Africa [12][16]. Financial Forecast and Valuation - The company is expected to achieve net profits of 667 million, 831 million, and 1.029 billion yuan for 2024, 2025, and 2026 respectively, reflecting growth rates of 23%, 25%, and 24% [3][4]. - The estimated earnings per share (EPS) for the same period are projected to be 0.50, 0.62, and 0.77 yuan [3][4]. - The reasonable valuation range for the company is estimated to be between 14.88 and 15.50 yuan, indicating a premium of 27% to 32% over the current stock price [3][5]. Business Segments - The company has established six major business segments: smart distribution and utilization, dispatch and cloud automation, power transmission and transformation automation, new energy and energy storage, comprehensive energy and virtual power plants, and industrial internet and smart manufacturing [1][15]. - The company is a key supplier for the dispatch platforms of both the State Grid and Southern Power Grid, with significant involvement in the construction of intelligent dispatch systems [2][29]. Market Trends - The report highlights a new wave of investment in distribution networks driven by the rapid development of distributed energy, charging facilities, and user-side energy storage [1][2]. - The demand for new generation dispatch systems is urgent, with the market for upgrades expected to exceed 10 billion yuan nationwide [2][3]. Competitive Position - The company is recognized as a top-tier player in the industry, with a leading market share in distribution automation and smart metering [12][24]. - The company has a robust R&D capability, with a significant number of patents and a commitment to innovation, maintaining R&D expenditure at around 8% of revenue [23][24].