Xu Ji Electric (000400) 2018 Annual Report Comments: Performance Meets Expectations A New Round of High-Speed Growth Is Coming

Xu Ji Electric (000400) 2018 Annual Report Comments: Performance Meets Expectations A New Round of High-Speed Growth Is Coming
The company’s 2018 results bottomed out in line with expectations.Since 2019, UHV DC construction has continued to advance, the distribution network construction has accelerated, and smart terminal upgrades have been updated to purchase new products.0.64/0.78/0.73 yuan, given 20 times PE in 2019 as a reasonable estimate of the company, corresponding to a target price of 12.8 yuan / share, maintain “Buy” rating. First-class performance bottomed out on schedule.The company achieved revenue of 82 in 2018.20,000 yuan (one year -20.46%), net profit attributable to mother 2.0 million yuan (ten years -67.47%), mainly due to the cutting-edge UHV construction and the delay in the delivery of orders on hand.In 2018, the company’s sales / management / financial expense ratios were 4 respectively.21% / 4.97% / 0.50% (decade +0.72 / + 1.01 pieces / +0.08pcts), the overall cost control has improved, and the company’s research and development costs are 3.35 billion (+1) percent.31%).The State Grid and its affiliated companies accounted for 67% of the company’s total sales initially.With the overall cooling of downstream demand, the company digested overlapping orders and improved operating cash flow. Net inflows in 20184.6.3 billion. UHV DC is highly deterministic and supports rapid repair of performance.As a leading supplier of core equipment and systems in the domestic DC field, the company’s market share of products such as ultra-straight and flexible converter valves (average UHV market share 35%, the same below), DC protection systems (50%), etc.Higher.At the same time, this year’s UHV large-scale construction put into operation 5 DC lines, the demand for converter valves reached the order of 10 billion, and the purchase of DC control and protection systems is expected to exceed 1 billion.The Qinghe Line has been tendered and announced. The Shaanxi-Wuhan Line is expected to start contributing revenue in 2019. The remaining three DC advances are approved for landing in Q2-Q3 in 2019. The current round of construction has been expanded and 青岛夜网 compressed to a bidding interval of about 20 days. The overall rhythmFaster, core suppliers are expected to reach the peak of performance confirmation in 2020.It is estimated that the company’s special direct orders for this round can reach 40 million. At the same time, considering that the company has to re-open Zhangbei, Wudong Derou direct orders have not yet been delivered, and the performance flexibility will increase in the next three years. The distribution network construction is expected to accelerate, and smart terminals are being updated.According to the national grid transformation plan, it is expected that the distribution network investment will enter a high-boom cycle from 2019 to 2020. The average annual investment is estimated to be about 380 billion to 400 billion U.S. dollars. The company is preparing for 苏州夜网论坛 the group’s distribution network leasing business.Ushered in rapid growth.At the same time, the flooding of the State Grid has helped to a certain extent the intelligent construction of distribution networks and the update requirements of intelligent acquisition terminals. The smart meter IR46 standard in 2019 is expected to usher in large-scale purchases, and the company’s smart meter business is expected to resume growth.The company’s new high-power charging pile has been applied in the Beijing Future Science City Demonstration Project, and it will replace the need for the construction of the charging network in the future. The company has a broad business space for charging and replacing systems. Risk factors: fluctuations in power grid investment, UHV approvals for construction progress are less than expected, distribution network transformation actions are less than expected, and market competition is intensified. Investment Advice.The company is expected to benefit in 2019 from the continued advancement of UHV DC construction, the acceleration of distribution network construction, and the upgrade and purchase of smart terminals. Performance will resume rapid growth and maintain the company’s net profit forecast for 2019-2020 at 6.43/7.81/7.39 trillion, corresponding to 0 EPS.64/0.78/0.73 yuan, the current sustainable corresponding PE is 16/13/14 times.According to the estimated level of comparable companies in the same industry, the last round of UHV scale construction of the company’s size range, and considering the company’s performance as a leader of UHV core equipment is highly deterministic and highly flexible, we believe that the company’s 20 times PE in 2019 is relatively reasonable, correspondingTarget price of 12.8 yuan / share, maintain “Buy” rating.