HUAMING(SZ:002270) Tai Ping Yang·2024-04-25 06:30Investment Rating - The report maintains a "Buy" rating for the company, with a target price based on the last closing price of 19.65 [7]. Core Views - The company reported Q1 2024 results that met expectations, with revenue of 451 million yuan, a year-on-year increase of 9.40%, and a net profit attributable to shareholders of 127 million yuan, up 7.59% year-on-year [1]. - The power equipment business continues to grow steadily, achieving revenue of 392 million yuan in Q1 2024, a year-on-year increase of 14.63% [1]. - The report anticipates stable growth in the company's performance due to accelerating overseas demand and steady domestic grid investment [1]. Summary by Sections Financial Performance - Q1 2024 gross margin was 52.39%, up 0.94 percentage points year-on-year, while net margin was 28.56%, down 0.66 percentage points year-on-year [1]. - The company’s operating expenses have been optimized, with sales, management, R&D, and financial expense ratios at 8.40%, 6.71%, 3.32%, and -0.74% respectively, showing year-on-year decreases [1]. Future Projections - Revenue projections for 2024-2026 are 2.356 billion yuan, 2.807 billion yuan, and 3.322 billion yuan, representing year-on-year growth rates of 20.14%, 19.12%, and 18.35% respectively [13]. - Net profit projections for the same period are 671 million yuan, 827 million yuan, and 991 million yuan, with growth rates of 23.65%, 23.37%, and 19.82% respectively [13]. - The report forecasts diluted EPS of 0.75 yuan, 0.92 yuan, and 1.11 yuan for 2024, 2025, and 2026 [13]. Business Segments - The power equipment business is expected to maintain a high gross margin in Q1 2024, with a positive outlook for future growth driven by improved product structure and increased overseas business [1]. - The company’s maintenance business, which saw a revenue decline in 2023, is projected to recover in 2024 as market acceptance increases [1].