SIEYUAN(002028) 长江证券·2024-03-11 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [8]. Core Views - The company has achieved sustained growth exceeding industry rates due to successful product expansion and new product introductions, supported by advantages in technology, sales, cost, and employee incentives. The company is expected to maintain strong competitiveness in the power equipment market while actively expanding into overseas markets and new industries such as energy storage and automotive electronics, which are anticipated to contribute additional growth momentum in the future [2][5][65]. Summary by Sections Introduction - Founded in 1993, the company has become one of the few comprehensive enterprises in China covering both primary and secondary power equipment. Over nearly 20 years, it has achieved rapid growth, with a revenue increase from 200 million yuan in 2004 to 12.5 billion yuan in 2023, reflecting a compound annual growth rate (CAGR) of approximately 24% [5][15]. Review of Growth Drivers - The company's growth has been driven by an expanding product matrix and the inherent growth potential of each product category. The product range has evolved from lightning protection devices to include manufacturing and testing equipment, covering high, medium, and low voltage products. Key growth factors include: 1. Technology R&D: The company has a strong technical foundation with significant R&D investment, leading the industry in R&D intensity. 2. Sales Capability: The company has a high revenue contribution per sales employee, indicating superior sales efficiency. 3. Cost Advantage: The company maintains higher gross margins compared to competitors in the high-voltage equipment sector. 4. Employee Incentives: Continuous stock incentive plans have been implemented to motivate employees [6][29][38]. Future Outlook - The company is expected to continue leveraging its advantages in technology, sales, cost, and employee incentives to maintain competitiveness in the power equipment market. Future growth will come from: 1. Product Expansion: The company is focusing on high-voltage switchgear, which is a core business, and has opportunities to expand into transformers and relay protection monitoring. 2. Market Expansion: The company is actively developing overseas markets, which have shown higher growth potential and profitability compared to domestic markets. The company has established a presence in various regions, including Europe and Southeast Asia, and has seen rapid growth in overseas revenue and orders. 3. Cross-Industry Development: The company is also exploring opportunities in energy storage and automotive electronics, which are expected to provide new growth support [7][40][61][65]. Investment Recommendations - The company is projected to achieve net profits of 1.54 billion yuan and 2 billion yuan in 2023 and 2024, respectively, with corresponding price-to-earnings (PE) ratios of 31 and 24 times [8][65].