Hexing(603556) 广发证券·2024-05-06 05:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of 49.25 CNY per share [31] Core Views - The company's 2023 and Q1 2024 performance exceeded expectations, driven by an increase in the proportion of high-margin solutions [35] - Overseas revenue accounted for over 60% of total revenue in 2023, with strong growth potential in Europe, Africa, and Latin America [36] - The company's smart electricity business is expected to grow steadily, while its new energy business is entering a new phase of development [34] Financial Performance - In 2023, the company achieved revenue of 4.20 billion CNY, a YoY increase of 26.91%, and net profit attributable to shareholders of 982 million CNY, a YoY increase of 47.97% [29] - Gross margin in 2023 was 41.90%, an increase of 3.67 percentage points YoY, while net margin was 23.39%, up 3.33 percentage points YoY [29] - For 2024-2026, the company is expected to achieve net profit attributable to shareholders of 1.20 billion, 1.47 billion, and 1.73 billion CNY, with YoY growth rates of 22.5%, 22.1%, and 17.7%, respectively [30] Business Segments Smart Electricity Business - Revenue in 2023 was 3.59 billion CNY, a YoY increase of 23.93%, with a gross margin of 43.85%, up 5.14 percentage points YoY [36] - Overseas revenue from the smart electricity business was 2.56 billion CNY, a YoY increase of 41.72%, with solutions accounting for approximately 60% of overseas revenue [36] Smart Distribution Business - Revenue in 2023 was 406 million CNY, a YoY increase of 24.19%, with a gross margin of 36.64%, up 1.74 percentage points YoY [36] - The company has developed products such as photovoltaic step-up transformers and has delivered distribution network projects in Africa [36] New Energy Business - Revenue in 2023 was 163 million CNY, a YoY increase of 283.50%, with a gross margin of 11.00%, down 1.18 percentage points YoY [36] - The company is expected to achieve rapid growth in its new energy business, with revenue growth rates of 25.2%, 20.0%, and 15.0% for 2024-2026 [42] Valuation and Peer Comparison - The company's 2024E P/E ratio is 18.55x, with a target P/E of 20x, implying a fair value of 49.25 CNY per share [37] - Comparable companies include Samsung Medical and Wasion Information, with average 2024E P/E ratios of 23.15x [52] Future Outlook - The company is expected to benefit from the replacement cycle of domestic electricity meters and the increasing penetration of smart meters in overseas markets [49] - The company's overseas channel advantages and cost management capabilities are expected to drive future growth, particularly in the new energy sector [34]