China XD(SH:601179) Huajin Securities·2024-05-05 02:32Investment Rating - The report assigns a rating of "Buy" for the company, indicating a positive outlook for future performance [2][10]. Core Insights - The company, China West Electric (601179.SH), is a leading player in the power transmission and distribution equipment sector, benefiting from the construction of ultra-high voltage projects and expansion into overseas markets [1][2]. - In 2023, the company achieved total revenue of 21.05 billion yuan, with a net profit attributable to shareholders of 885 million yuan, reflecting a year-on-year growth of 44.5% [1][3]. - The company has a comprehensive product line in the power transmission and distribution industry, including high-voltage switches, transformers, and reactors, with significant growth in revenue from these segments [1][6]. Financial Performance - The company reported a revenue of 21.05 billion yuan in 2023, with a projected revenue growth to 24.71 billion yuan in 2024, representing a year-on-year increase of 17.4% [3][9]. - The net profit attributable to shareholders is expected to grow from 1.16 billion yuan in 2024 to 1.90 billion yuan in 2026, with corresponding EPS increasing from 0.23 yuan to 0.37 yuan [2][3]. - The gross margin is projected to remain stable around 18.1% for 2024 and 2025, slightly improving to 18.2% in 2026 [9][12]. Product Segmentation - The high-voltage switch segment generated revenue of 76.63 billion yuan in 2023, with a year-on-year growth of 21.53%, and is expected to reach 85.83 billion yuan by 2024 [6][8]. - The transformer segment saw a significant increase in revenue to 78.23 billion yuan in 2023, up 40.31% year-on-year, with projections of 101.70 billion yuan in 2024 [6][8]. - The electronic power and engineering trade segment is anticipated to grow steadily, with expected revenues of 38.41 billion yuan in 2024 [6][8]. Market Position and Outlook - The company secured contracts worth approximately 79.28 billion yuan for ultra-high voltage equipment in 2023, maintaining a market share of about 19.56% [1][2]. - The report highlights the expected acceleration in ultra-high voltage construction, with total investment in grid construction projected to exceed 500 billion yuan in 2024 [1][2]. - The company is well-positioned to benefit from ongoing domestic and international market expansions, particularly in the context of global energy transitions and grid upgrades [2][10].