HPEC(600312) 国金证券·2024-12-24 00:37Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 23.4 RMB per share for 2025, based on a 21x PE valuation [30]. Core Insights - The company is positioned as a leader in the high-voltage switch market, benefiting from the acceleration of domestic main network expansion, rising distribution network demand, and increased overseas investment in power grids [30]. - The company is expected to achieve a net profit of 12.7 billion RMB, 15.1 billion RMB, and 17.3 billion RMB for the years 2024 to 2026, reflecting year-on-year growth rates of 56%, 19%, and 14% respectively [30]. Summary by Sections Industry and Company Fundamentals - The high-voltage switch market in China is estimated to be around 500 billion RMB, with the primary demand coming from State Grid and Southern Grid projects [78]. - The company has over 50 years of experience in the high-voltage switch sector and has established itself as a core listed company under the China Electric Equipment Group [47][93]. Company Deep Dive - The company has seen significant improvements in operations since 2022, with a focus on enhancing quality and efficiency [93]. - The high-voltage segment's revenue grew from 3.88 billion RMB in 2019 to 6.16 billion RMB in 2023, with a CAGR of 12% [54]. High Voltage Segment - The company holds a leading position in the high-voltage switch market, with a market share of approximately 36% in the 1000kV AC switch market and 44% in the DC switch market [30]. - The demand for high-voltage switches is driven by the ongoing construction of ultra-high voltage projects and the expansion of the main network [30]. Distribution Network and International Segment - The distribution network segment is expected to see rapid growth due to new policies aimed at enhancing the quality of distribution networks [26]. - The company has expanded its international business, covering over 70 countries and regions, with a significant increase in revenue from international operations, which grew by 261% in 2023 [39][101]. Profit Forecast and Valuation - The company is projected to achieve revenues of 12.88 billion RMB, 14.79 billion RMB, and 16.94 billion RMB from 2024 to 2026, with growth rates of 16.26%, 14.83%, and 14.53% respectively [76]. - The report emphasizes the company's strong market position and the expected benefits from ongoing investments in the power grid sector [30].