XJEC(SZ:000400) GOLDEN SUN SECURITIES·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company achieved significant growth in 2023, with revenue reaching 17.06 billion yuan, a year-on-year increase of 13.51%, and a net profit of 1.01 billion yuan, up 28.03% year-on-year. The fourth quarter alone saw revenue of 6.40 billion yuan, a year-on-year increase of 8.17%, and a net profit of 233 million yuan, up 70.2% year-on-year [1] - The company is expected to benefit from the increasing adoption of flexible direct current (DC) technology, with four new DC projects anticipated to be approved in 2024. The company is a core supplier of converter valves and is positioned to gain from the expected surge in demand for flexible DC technology [1] - The company is also expanding its presence in both domestic and international markets, with significant growth in orders from the State Grid and notable international projects in regions such as South America and Europe [1] Summary by Sections Financial Performance - In 2023, the company reported a gross margin of 18%, a decrease of 1.04 percentage points year-on-year, and a net margin of 6.95%, an increase of 0.45 percentage points year-on-year. The operating expense ratio was stable at 10.86%, down 0.29 percentage points year-on-year [1] - Revenue from various segments showed stable growth, with the new energy and system integration segment growing by 42.03% year-on-year [1] Revenue Forecast - The company forecasts net profits of 1.21 billion yuan, 1.57 billion yuan, and 1.84 billion yuan for 2024, 2025, and 2026, respectively, representing year-on-year growth rates of 20%, 30%, and 17% [1] Market Position - The company is recognized as a leading supplier in the power equipment sector, with a significant increase in orders from the State Grid and a strong position in the international market, including projects in Chile and Italy [1]