Times Electric(SH:688187) East Money Securities·2024-05-13 08:00Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company's performance in the rail transit equipment sector is strong, with a year-on-year revenue increase of 43.74% in Q1 2024, driven by the delivery of 55 train orders at the end of 2023. The overall passenger volume in the railway sector also saw a significant increase of 28.5% year-on-year [2][3] - The company is expected to benefit from the upward trend in the industry fundamentals and large-scale equipment updates, with a focus on maintenance and repair services as the railway industry undergoes significant equipment renewal [2] - The company has established an integrated industrial layout in the transportation and energy sectors, positioning itself for rapid growth in both rail transit and emerging equipment businesses [7] Summary by Sections Rail Transit Equipment - In Q1 2024, the rail transit equipment business generated revenue of 21.2 billion yuan, a substantial increase of 43.74% year-on-year. The growth is attributed to the delivery of train orders and an increase in passenger traffic [3] - The company is poised to benefit from the upcoming maintenance cycles and the national policy aimed at phasing out old diesel locomotives by 2027 [2] Emerging Equipment - The revenue from the new energy vehicle drive systems reached 375 million yuan in Q1 2024, reflecting a year-on-year growth of 10.82%. The company ranks sixth in the market share for drive systems and has secured orders from major clients [2] - The industrial converter segment achieved revenue of 298 million yuan, up 18.35% year-on-year, with significant orders in the photovoltaic inverter business, which has seen the company rise to a top-three position in the domestic market [2] Financial Performance - The company reported total revenue of 39.25 billion yuan in Q1 2024, a year-on-year increase of 27.22%. The net profit attributable to shareholders was 5.68 billion yuan, up 30.44% year-on-year [3] - The gross margin improved to 34.06%, an increase of 1.64 percentage points year-on-year, primarily due to adjustments in product mix [3] Future Outlook - The company is expected to see a compound annual growth rate (CAGR) in net profit of 21.12% for 2024-2026, with earnings per share (EPS) projected to reach 2.66 yuan, 3.19 yuan, and 3.65 yuan for the respective years [7][8]