\u3000\u3000 Shenzhen Kstar Science & Technology Co.Ltd(002518) (002518)
The company is an old UPS manufacturer in China, with a comprehensive layout in the field of data center and new energy. By virtue of the “dual energy + data center” layout, the company has entered the field of new data-driven products in China for a long time, and is now one of the earliest enterprises in the field of “dual energy + data center” in 2010. The company has been operating steadily for a long time. From 2010 to 2020, the compound growth rate of net profit attributable to the parent company reached 14.4%, and its financial condition is healthy, with abundant cash on hand and low asset liability ratio.
The construction of new information infrastructure has accelerated, and the company’s data center business has developed steadily. Information infrastructure is an important part of the “new infrastructure”. Under the dual background of steady growth and digital transformation, we expect China’s data center construction to maintain a rapid pace in the future. The company’s ups business has a solid chassis and long-term market share. In recent years, the data center product system has been continuously upgraded. We believe that the company’s data center business is expected to fully benefit from the construction of China’s new information infrastructure.
With the deepening of global energy transformation, the company has broad space for new energy business. From 2018 to 2020, China’s photovoltaic and new energy vehicle market was in the period of policy adjustment. In recent two years, the company’s new energy business revenue and profit level decreased significantly compared with the peak in 2017. With the new energy industry gradually entering the era of parity, we believe that the company is ushering in new development opportunities, and the new energy business is expected to return to the track of high-speed growth. From the perspective of industry demand, we estimate that the energy storage / photovoltaic inverter / electric vehicle charging pile is expected to achieve an average annual compound growth of more than 80% / 20% / 40% respectively from 2021 to 2025, and the downstream market continues to boom. From the perspective of the company itself, in terms of product technology, the company has nearly 30 years of accumulation in the power electronics industry, outstanding independent research and development strength, and complete product systems of energy storage, photovoltaic and charging pile; At the sales level, the company started with small and medium-power UPS business, with sales and service networks all over the world. UPS business and new energy business may achieve a certain degree of coordination in channels; At the financial level, the company has been operating steadily for a long time and has a large space for balance sheet expansion, which can provide a strong financial guarantee for the development of new energy business. After the adjustment period in recent years, we believe that the company’s long-term growth space in the field of new energy has been opened.
Investment and construction: we expect the company to realize a net profit attributable to the parent company of RMB 351 / 436 / 550 million from 2021 to 2023, with a year-on-year increase of 16% / 24% / 26%. At present, the corresponding PE share price is 40 / 32 / 26 times respectively, maintaining the “Buy-A” investment rating, and the six-month target price is RMB 27.59.
Risk tips: changes in industrial policies, intensified market competition, new business promotion less than expected, model assumptions are quite different from the actual situation, etc
