SIFANG(SH:601126) Changjiang Securities·2025-06-23 05:10Investment Rating - The investment rating for the company is "Buy" and is maintained [9][11]. Core Viewpoints - The company has a solid position as a leader in the secondary equipment sector, with a robust competitive advantage and a diversified business model. The current valuation is low, and the company offers high dividends, with a dividend yield among the industry leaders [9][11]. - The company has achieved a compound annual growth rate (CAGR) of 12.8% in revenue and net profit over the past 19 years, indicating stable development [3][6]. - The management team possesses extensive industry experience and expertise, positioning the company for new growth opportunities in the context of the new power system [3][6]. Summary by Sections Company Overview - Founded in 1994 by Yang Qixun, an academician of the Chinese Academy of Engineering, the company has over 30 years of history. It started with relay protection technology and has expanded its business to cover various segments of power generation, transmission, distribution, usage, and storage [3][6][17]. Market Position - The company's secondary system business, particularly relay protection, is a cornerstone of its operations and is currently experiencing favorable growth opportunities. The State Grid's conventional bidding for secondary equipment has maintained a scale of 4 to 5 billion yuan, with a significant increase expected in 2025 [7][40]. Financial Performance - The company has shown consistent revenue growth, with a CAGR of 12.8% from 2006 to 2024. The revenue growth rate reached 20.86% in 2024, marking a new high since 2022 [23][25]. - The company's net profit reached 716 million yuan in 2024, with a CAGR of 12.8% from 2005 to 2024, indicating strong internal governance and recovery post-2019 [37][38]. Business Segments - The company has seen significant growth in its power plant and industrial automation business, with an annual growth rate of 20.6% from 2019 to 2024. This segment has become a major contributor to overall revenue growth [8][25]. - The company is actively expanding into new areas such as renewable energy services, microgrids, and energy storage, with notable projects in offshore wind and data centers [8][9]. Investment Outlook - The company is expected to achieve net profits of 844 million yuan and 958 million yuan in 2025 and 2026, respectively, with corresponding price-to-earnings ratios of 16 and 14 times [9].