Dongfang Electronics Co.Ltd(000682) (000682)
Dongfang Electronics Co.Ltd(000682) business benchmarking: Nari Technology Co.Ltd(600406) .
The company’s power and power grid related products and businesses are comprehensively benchmarked Nari Technology Co.Ltd(600406) . The business covers a wide range, including power generation end, power transmission and transformation end, power consumption end and other links. Some product lines are among the best in China, and the company’s products and service capacity in the whole power industry chain is leading in China. We believe that the company’s future growth capacity is underestimated by the market. During the 14th Five Year Plan period, with the marginal increase of national energy input, the company is expected to accelerate its growth and fully enjoy the benefits of industry growth β。
There is a high probability that the share of the State Grid will increase, and the share of the South Grid will keep pace with that of Nari. Dispatching, electricity meter and distribution network are expected to become the three-level engines driving the company’s performance.
1) At present, the company’s share of the core dispatching business of the State Grid ranks second only to Nari. The core dispatching business of the South Grid keeps pace with Nari, which is enough to prove the competitiveness of the company’s power grid core technology in the industry. With the promotion of the market-oriented reform of the State Grid, we believe that the company is expected to increase its share in the State Grid.
2) Smart meter companies are among the best in the industry and have become the company’s business card. The 14th five year plan is expected to usher in an update cycle.
3) Relying on the company’s core competitiveness in dispatching, intelligent distribution network is expected to become the most important business driving the company’s performance in 2022.
Elasticity and catalyst: energy storage.
The company has actively arranged new energy, energy storage and other new businesses, and has increased R & D investment in the core technology of battery energy storage converter PCs and energy management system EMS. At present, EMS has been applied in the energy storage field of industrial park projects. Facing the huge incremental energy storage market, it is expected to bring incremental flexibility to the company’s performance.
Investment suggestions:
The company’s business can be benchmarked Nari Technology Co.Ltd(600406) , and the proportion of business software continues to increase. The compound growth rate of revenue over the past five years was 12%. With the increase and acceleration of investment by the State Grid and the South Grid in the 14th five year plan, we believe that the company’s performance is expected to reach a new level. We estimate that the company’s operating revenue from 2021 to 2023 will be RMB 4.33/53.4/6.61 billion, the net profit attributable to the parent company will be RMB 3.4/4.5/630 million, and the earnings per share (EPS) will be RMB 0.26/0.34/0.47, corresponding to the closing price of RMB 8.01 on December 10, 2021, and the PE will be 31 / 24 / 17 times respectively. It is highly recommended to give a “buy” rating for the first coverage.
Risk tips: 1) market share is squeezed by competitors; 2) The investment of State Grid and South grid is less than expected; 3) Systemic risks caused by economic downturn; 4) Manage risk.
