\u3000\u3000 Shenzhen Kstar Science & Technology Co.Ltd(002518) (002518)
China’s leading power enterprise, data center and new energy business blossom at multiple points
Shenzhen Kstar Science & Technology Co.Ltd(002518) is an industry-leading UPS manufacturer and one of the first enterprises to enter the data center solution in China. The main products of the company’s data center include uninterruptible power supply (UPS), precision air conditioning, high-voltage DC power supply, communication power supply, etc. Now it has formed two product lines: data center and new energy (including photovoltaic, energy storage and charging pile business), accounting for 78% / 10% respectively by the end of 2020.
High prosperity of digital energy: counting from the east to the West drives 100 billion investment increment, and energy storage ushers in the blue ocean market
Counting from the east to the West drives the overall acceleration of IDC construction, and the total investment during the 14th Five Year Plan period is expected to exceed 400 billion yuan. Recently, the national development and Reform Commission, the central network information office and other departments jointly issued a notice that the “counting from the east to the west” project was officially launched, and ten data center clusters will be built nationwide. During the 14th Five Year Plan period, it is expected to drive the investment and construction of IDC to exceed 400 billion yuan; The cost pressure of photovoltaic modules is reduced, and the installed capacity of new energy and energy storage is expected to maintain an increase in speed: 1) photovoltaic: it is expected that the newly added photovoltaic installed capacity in China is expected to exceed 110gw in 2025, with an average annual compound growth rate of 11% during 2020-25. In 2022, the cost pressure at the module end will be reduced, and the midstream shipment is expected to increase; 2) Energy storage: the integration of optical energy storage is accelerated, and electrochemical energy storage opens the 100 billion blue ocean market.
Advantages and growth: China’s leading UPS enterprises join hands with Ningde energy storage to accelerate the development
1) data center products: the company’s data center products focus on UPS Technology, have outstanding comprehensive solution ability, occupy a leading position, and the gross profit margin is higher than the average level of comparable companies. They have a high share in the market of operators, financial government and enterprise customers, and contribute potential increment under the background of new customer group development and “computing from the east to the west”; 2) Photovoltaic business: after the impairment provision is completed, the impact of overseas epidemic situation has improved and gradually subsided, and the light pack has ushered in the bottom reversal; 3) Energy storage business: the company has been deeply engaged in power supply technology for many years and has the production capacity of energy storage PCs and special energy storage pack products. It has joined hands with Ningde to build a plant and put the production line into operation, driving the overall acceleration of energy storage business at home and abroad; 4) The charging pile business maintained steady growth.
Risk tips
The promotion of “counting from the east to the west” was less than expected, the shipment of photovoltaic and energy storage was less than expected, and the epidemic repeatedly affected the construction.
Be optimistic about the growth of the industry and the company’s business, cover it for the first time, and give a “buy” rating
We expect that the company’s revenue from 2022 to 2023 will be RMB 3.6 billion / 4.7 billion respectively, with a year-on-year increase of + 30% / 32% (without considering the potential incremental orders of Eastern digital Western Computing), the net profit attributable to the parent company will be RMB 460 / 580 million, with a year-on-year increase of 31% / 28%, the corresponding EPS will be RMB 0.78/1.00, and the corresponding PE of the current stock price will be 31 / 24 times, which is lower than the average level of comparable companies. It will be covered for the first time and given a “buy” rating.
