DFDR(SZ:300217) Guotai Junan Securities·2024-04-02 16:00Investment Rating - The investment rating for Dongfang Electric Heating (300217) is "Buy" with a target price of 6.20 [19][15]. Core Views - The company is one of the largest manufacturers of electric heating equipment in China, with significant growth expected in its new energy and traditional air conditioning segments [19][15]. - The financial forecast indicates a substantial increase in revenue and net profit for 2023, with expected revenue of 41.16 billion and a net profit of 655 million, reflecting a year-on-year growth of 7.8% and 117% respectively [19][15]. - The report highlights a significant improvement in operational performance in Q1 2024, with expectations for continued growth in new business areas [19][15]. Financial Summary - Income Statement: - Total revenue for 2021 was 2,787 million, increasing to 3,819 million in 2022, and projected to reach 4,116 million in 2023 [19]. - EBIT rose from 137 million in 2021 to 310 million in 2022, with a forecast of 785 million for 2023 [19]. - Net profit attributable to shareholders increased from 174 million in 2021 to 302 million in 2022, with a projection of 655 million for 2023 [19]. - Balance Sheet: - Total assets are expected to grow from 5,334 million in 2021 to 8,141 million in 2023 [19]. - Shareholder equity is projected to increase from 2,808 million in 2021 to 3,945 million in 2023 [19]. - Cash Flow Statement: - Free cash flow is expected to improve significantly from -361 million in 2021 to 1,035 million in 2023 [19]. - Operating cash flow is projected to rise from -65 million in 2021 to 523 million in 2023 [19]. Growth Metrics - Revenue growth rate is forecasted at 7.8% for 2023, with EBIT growth rate expected to be 153% [19]. - The net profit growth rate is projected at 117.2% for 2023 [19]. - The company maintains a strong gross margin, with a forecasted gross margin of 23.7% for 2023 [19]. Valuation Ratios - The price-to-earnings (PE) ratio is projected to decrease from 43.98 in 2021 to 11.66 in 2023 [19]. - The price-to-book (PB) ratio is expected to decline from 2.91 in 2021 to 1.97 in 2023 [19]. - The dividend yield remains stable at 0.4% across the forecast period [19].