Hexing(SH:603556) Shanghai Securities·2024-04-18 01:30Investment Rating - The investment rating for the company is "Buy" (maintained) [19][24][29] Core Views - The company reported a significant increase in revenue and net profit for 2023, with total revenue reaching 4.20 billion yuan (up 26.91% year-on-year) and net profit attributable to shareholders at 0.98 billion yuan (up 47.90% year-on-year) [4][29] - The strong performance is attributed to the growth in the smart electricity business, particularly in overseas markets, and an increase in the proportion of software and solutions [4][29] - The company is positioned as a pioneer in exporting power equipment, benefiting from the acceleration of global power investment and the increasing demand for smart grid solutions [4][29] Financial Summary - For 2023, the company achieved a net profit of 0.98 billion yuan, with expectations for 2024-2026 net profits of 1.22 billion yuan, 1.51 billion yuan, and 1.83 billion yuan respectively, reflecting growth rates of 24.5%, 23.3%, and 21.5% [20][29] - The projected revenue for 2024 is 5.27 billion yuan, with a year-on-year growth rate of 25.5% [20][29] - The company maintains a strong cash flow position, with operating cash flow of 1.10 billion yuan in 2023, expected to decrease to 0.27 billion yuan in 2024 due to increased investments [10][20] Business Segments - The smart electricity segment generated 3.60 billion yuan in revenue, with a year-on-year growth of 23.93%, and overseas revenue reaching 2.56 billion yuan, up 41.72% [4][29] - The smart distribution segment reported revenue of 0.41 billion yuan, with significant growth in overseas markets [4][29] - The renewable energy segment saw a remarkable increase in revenue to 0.16 billion yuan, up 283.50% year-on-year, driven by strong performance in international markets [4][29] Market Outlook - The company is expected to continue benefiting from the dual growth in domestic and international markets, with a focus on expanding its software and solution offerings [4][29] - The overall market for power equipment is anticipated to enter a favorable cycle, driven by increasing investment in smart grid technologies and renewable energy [4][29]