FULING POWER(SH:600452) GOLDEN SUN SECURITIES·2026-02-04 02:24Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [4]. Core Insights - Fuling Power is positioned as the only listed platform for energy conservation in distribution networks under the State Grid, benefiting from strong state-owned backing and a dual business model focusing on regional grid operations and energy conservation [1][2]. - The company is expected to achieve revenue growth of 2.5%, 13.7%, and 11.0% for the years 2025, 2026, and 2027 respectively, with net profit projections of 4.75 billion, 5.93 billion, and 7.12 billion yuan [4]. Summary by Sections 1. Company Background - Fuling Power has undergone multiple rounds of state-owned capital integration, establishing itself as a specialized platform for energy conservation in distribution networks [14]. - The company has a clear shareholding structure, with the State Grid holding a significant stake, ensuring stable governance and strategic direction [17][20]. 2. Business Operations - The company operates in two main areas: regional grid operations and energy conservation services, focusing on reducing energy loss and improving efficiency [24]. - The energy conservation business is expected to benefit from ongoing policy support and industry demand for loss reduction [2][3]. 3. Financial Performance - In 2024, the company anticipates a 6.34% increase in revenue from its grid operations, reaching 1.986 billion yuan, while the energy conservation segment is projected to see a decline in revenue to 1.127 billion yuan due to project transitions [2][4]. - The company’s operating cash flow is robust, projected to reach 1.59 billion yuan in 2024, supporting future expansion [2]. 4. Market Trends - The report highlights a favorable environment for the company, with regional electricity demand expected to grow by 4.67% in 2024, driven by industrial growth and electricity market reforms [2][35]. - The company is actively exploring new business models, including smart grids and energy storage, to enhance its growth trajectory [3]. 5. Investment Outlook - The report forecasts steady revenue growth for the company, with expected revenues of 3.195 billion, 3.633 billion, and 4.031 billion yuan for 2025, 2026, and 2027 respectively [4]. - The company’s earnings per share (EPS) are projected to be 0.31, 0.39, and 0.46 yuan for the same years, indicating a positive outlook for profitability [4].