HUAMING(002270) Minsheng Securities·2024-04-12 16:00Investment Rating - The report maintains a "Recommended" rating for the company [9][14]. Core Views - The company achieved a revenue of 1.961 billion yuan in 2023, representing a year-on-year growth of 14.57%. The net profit attributable to shareholders was 542 million yuan, with a significant increase of 50.90% [9]. - The company is a leader in the transformer tap switch market and is accelerating its overseas expansion, particularly in Southeast Asia and the United States [9]. - The report forecasts revenue growth for 2024-2026 to be 2.426 billion yuan, 2.915 billion yuan, and 3.520 billion yuan, with corresponding growth rates of 23.7%, 20.2%, and 20.8% respectively [9]. Financial Forecasts - Revenue (in million yuan) for 2023A, 2024E, 2025E, and 2026E is projected at 1,961, 2,426, 2,915, and 3,520 respectively [11]. - Net profit attributable to shareholders (in million yuan) is expected to be 542, 659, 806, and 991 for the same years, with growth rates of 50.9%, 21.4%, 22.3%, and 23.0% respectively [11]. - Earnings per share (in yuan) are forecasted to be 0.61, 0.74, 0.90, and 1.11 for 2023A, 2024E, 2025E, and 2026E [11]. Business Performance - The company's power equipment business generated revenue of 1.625 billion yuan in 2023, up 20.4% year-on-year, driven by domestic grid investment and overseas market demand [9]. - The gross margin for 2023 was 52.23%, an increase of 6.82 percentage points year-on-year, while the net margin was 28.08%, up 2.93 percentage points [9]. - The company holds over 300 technology patents and is recognized for its advanced manufacturing technology in high-voltage transformer tap switches [9]. Market Expansion - The company has established a subsidiary in Singapore and is building a localized team to serve the Southeast Asian market, aiming for significant breakthroughs in the next 2-3 years [9]. - In the U.S., the company is actively integrating and has received multiple orders while seeking opportunities for capacity expansion [9]. Valuation Metrics - The report indicates that the company's PE ratios for 2024E, 2025E, and 2026E are projected to be 28X, 23X, and 18X respectively [9]. - The PB ratios for the same years are expected to be 5.6, 5.2, and 4.7 [11].