20230721-国联证券-伟创电气-688698.SH-海外收入稳定增长_预计半年度实现扣非同比+55_75__3页_374kb

Wecon Electric (688698) Financial and Strategic Summary

Key Financial Highlights

• 2023 Half-Year Performance: Forecasted revenue between 59.9 billion and 65.2 billion yuan, representing a 36% to 48% year-over-year increase. Expected net profit between 9.9 billion and 11.0 billion yuan, with a 25% to 48% growth rate. Non-GI profit between 9.6 billion and 10.8 billion yuan, growing 55% to 75% YoY.
• Margin Improvement: Gross profit margin reached 38.39%, an increase of 4 percentage points from the previous year. Excluding share-based payments, net profit growth was 30% to 45%.
• Gross Profit: Costs controlled effectively through supply chain integration, driving efficiency.

Business and Market Strategy

• Overseas Expansion: Revenue from overseas markets totaled 20.3 billion yuan in 2022, up 185.92% year-over-year, and accounted for 22.39% of total revenue. Active in India, Europe, and Southeast Asia, contributing to stable export growth.
• Product Development: Servo and control systems have a compound annual growth rate of 64.98% since 2019, now comprising 26.25% of revenue. Future growth driven by product innovation, such as low-voltage servos and compact PLCs, with potential for higher gross margins due to in-house component development and scale economies.
• Market Position: Strengthened domestic client relationships, leading to sizeable growth in both revenue and profitability.

Financial Forecast and Valuation

• Projected Growth (2023-2025): Forecasted revenue of 130.2 billion yuan rising to 184.2 billion yuan (43.76% growth) and then to 260.1 billion yuan (41.42% CAGR). Net profit expected at 19.8 billion yuan (41.32% growth), 27.5 billion yuan (39.25% CAGR), and 38.0 billion yuan (38.21% final growth). EPS projections are 1.09 yuan, 1.52 yuan, and 2.10 yuan per share, with a three-year CAGR of 40.60%.
• Valuation: Target price of 3,825 yuan per share, based on a 35 times PE for 2023, granting an "Add" rating. Current price is 3,377 yuan, suggesting upside potential.

Risk Factors

• Risk Assessment:
  • Technological lag or product failure in innovation (e.g., new systems).
  • Supply chain risks, including import dependency on ICs and IGBTs.
  • Geopolitical and currency fluctuations, such as India's trade policies and foreign exchange volatility.
  • Market-specific risks in overseas regions.

Overall Conclusion

The company demonstrates strong revenue and profit growth, bolstered by overseas expansion and innovative product lines, positioning it for sustained competitiveness in the industrial automation sector. However, risks related to technology and market dependencies must be monitored. Analyst recommends "Add" to portfolio.