XJEC(SZ:000400) Southwest Securities·2024-04-11 16:00Investment Rating - The report maintains a "Hold" rating for Xuji Electric (000400) with a current price of 24.77 CNY [1]. Core Views - The company achieved a revenue of 17.06 billion CNY in 2023, representing a year-on-year growth of 13.5%, and a net profit attributable to shareholders of 1.01 billion CNY, up 28% [2][3]. - The company is positioned as a leading player in the domestic ultra-high voltage converter valve market, benefiting from increasing industry demand [2]. - The flexible direct current (DC) converter valve has a value approximately 2-3 times that of conventional DC, which will support the company's growth as the penetration rate of flexible DC increases [2]. - The company’s revenue from its smart electric meter business reached 3.48 billion CNY, growing 16.8% year-on-year, while its revenue from charging and swapping stations surged by 63.6% to 1.2 billion CNY [2]. - The overseas business saw significant growth, with revenue increasing by 98% to 150 million CNY, indicating a strong expansion into international markets [2]. Summary by Sections Financial Performance - In Q4 2023, the company reported a revenue of 6.4 billion CNY, an 8.2% increase year-on-year, and a net profit of 230 million CNY, up 70.2% [2]. - The gross margin for 2023 was 18%, with a net margin of 7%, showing a slight improvement in net margin compared to the previous year [2]. - The company expects revenues for 2024-2026 to be 19.59 billion CNY, 22.56 billion CNY, and 24.93 billion CNY, respectively, with net profit growth rates of 16.1%, 28.1%, and 14.1% [2][3]. Business Segments - The direct current transmission system business generated 720 million CNY in revenue, a 3.1% increase, with expectations for significant growth in the coming years [2][6]. - The smart grid and ultra-high voltage core products are expected to continue driving growth, supported by the increasing demand for flexible DC and EPC projects [2][6]. - The company is actively expanding into data centers and hydrogen energy sectors, diversifying its business portfolio [2]. Market Position - Xuji Electric holds a leading market share in smart electric meters within the State Grid's collective procurement rankings [2]. - The company is well-positioned to capitalize on the growing demand for electric vehicle charging infrastructure, with a strong technological advantage in the sector [2][6].