Guoguang Electric (SH:688776) China Post Securities·2025-03-09 07:47Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Views - The establishment of a joint venture, Xianjue Juneng Technology, is expected to enhance the company's nuclear industry business and create new growth momentum [5]. - The company has a significant competitive advantage in the nuclear industry, with a promising outlook for controlled nuclear fusion development, evidenced by a substantial revenue growth from 0.19 billion yuan in 2018 to 3.73 billion yuan in 2023, reflecting a compound annual growth rate of 81% [6]. - The microwave device business remains stable, with ongoing expansion into commercial aerospace and missile-mounted fields contributing to new revenue streams [7]. - The company anticipates a revenue decline in 2024, with projected revenue of 5.43 billion yuan, a decrease of 27.17% year-on-year, and a net profit of 0.48 billion yuan, down 46.72% year-on-year. However, recovery in demand is expected in the military sector, and the company is poised to benefit from accelerated domestic controlled nuclear fusion development [9]. Financial Summary - The company reported a revenue of 7.45 billion yuan in 2023, with projections of 5.43 billion yuan for 2024, 8.16 billion yuan for 2025, and 10.57 billion yuan for 2026, indicating a growth rate of 50.29% in 2025 and 29.56% in 2026 [11]. - The net profit attributable to the parent company is expected to recover from 0.48 billion yuan in 2024 to 1.17 billion yuan in 2025 and 1.65 billion yuan in 2026, with corresponding price-to-earnings ratios of 63 and 45 times [9][11].