\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 82 Dongfang Electronics Co.Ltd(000682) )
The construction of ubiquitous Internet of things + the rapid release of epidemic demand, and the electricity meter ushered in explosive growth. (1) The State Grid proposes to build the ubiquitous power Internet of things by 2024. Smart meters are the sensing layer terminals of the power Internet of things, or benefit from the construction of the ubiquitous power Internet of things. (2) From 2018 to 2019, smart meters ushered in the replacement cycle. Affected by the epidemic, the demand for hard replacement was overstocked. From 2021 to now, the demand for electricity meters has increased explosively. The single-phase smart meter of the State Grid has increased by 28.25% year-on-year, and the price of three-phase smart meter has increased.
Orders in China’s smart meter market are scattered, and the competition pattern tends to be stable. Judging from the past state grid unified bidding orders, Ningbo Sanxing Medical Electric Co.Ltd(601567) , Guangzhou Wahlap Technology Corporation Limited(301011) , Weston, Nari Technology Co.Ltd(600406) , Weisheng group are in the first echelon, with a market share of about 3% – 5%.
Dongfang Electronics Co.Ltd(000682) Weston: a leading enterprise in smart meters. (1) The company is located in the first echelon of smart meters in China, and the State Grid has been in the top three for six consecutive years; Under the background of demand release, the order volume and order amount are expected to increase significantly. (2) Excellent product strength and continuous leading technical strength; High voltage electric energy meter has been selected into the list of champion products, and it is also the only manufacturer in China to provide digital primary and secondary fusion column circuit breaker scheme.
Investment suggestion: Dongfang Electronics Co.Ltd(000682) business products are fully benchmarked Nari Technology Co.Ltd(600406) . During the 14th Five Year Plan period, with the increase and acceleration of investment by the State Grid and the South grid, we believe that the company’s performance is expected to reach a new level. The maintenance profit forecast is as follows: it is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 43.3/53.4/6.61 billion, the net profit attributable to the parent company will be RMB 340 / 4.5/630 million, the earnings per share (EPS) will be RMB 0.26/0.34/0.47, corresponding to the closing price of RMB 7.24 on March 3, 2022, and the PE will be 28 / 21 / 16 times respectively. It is highly recommended to maintain the “buy” rating.
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.
