every AI flash, on January 14, 2024, huafu securities issued a research report to comment on jinpan technology (688676).

Investment Points:

Transformers: dry-change stealth champion, complete product matrix, overseas market thick and thin hair. The company deep-cultivated transformers and transmission and distribution equipment research and development and manufacturing, in the wind power special dry-type transformer subdivision track in the international leading position, 2021 the company's wind power dry-type transformer global market share of about 25.5 percent. 2023H1 completed the new environmentally friendly liquid-immersed transformer onshore wind power 7MW or more solutions, offshore wind power 14MW-20MW solutions. In addition, the company's products represented by transformers are fully rolled out in the fields of new energy photovoltaics/energy storage/hydrogen energy, and non-new energy industrial support/data center/high-end equipment. The company has been deeply engaged in overseas markets for more than 20 years, with subsidiaries in the United States and factories in Mexico. 2023H1 signed an export order of 1.048 billion yuan, the same as +157. In August 23, the company signed 5-year and 6-year old orders with two major overseas customers respectively, which will take the lead in sharing the global prosperity of new energy and electrification for transformer equipment.

Energy storage: layout of high-voltage cascade and low-voltage scheme, large storage/industrial and commercial/household storage simultaneous spread. With rich R & D and manufacturing experience in the field of power electronics, the company expands at full speed from products to systems to energy storage. Has launched the power generation side/grid side of the medium and high-voltage cascade storage system, low-voltage energy storage system, module chemical commercial storage, household low-voltage energy storage series products, comprehensive coverage of energy storage multi-scenario. Guilin and Wuhan have a total production capacity of 3.9GWh and have undertaken a number of orders of over 100 million yuan.

Digitalization: The internal transformation has paid off, broadening the new growth curve externally. The company's internal manufacturing digital transformation, has been put into operation in Haikou, Guilin factory has been effective. External has accumulated more than 0.4 billion yuan of digital factory overall solution business orders, is expected to open up a new growth curve.

profit forecast and investment suggestion: we expect the company's operating income from 2023 to 2025 to be 76.5/102.7/13 billion yuan, + 61%/34%/27% year-on-year, and the net profit attributable to the parent is 5.2/7.7/1.13 billion yuan respectively, + 82%/50%/46% year-on-year, corresponding to the current market value PE of 32/22/15 times. Considering that the company's transformers, energy storage and digital factories are the same force, is one of the few high-end power equipment manufacturers that can enter the U.S. and European transformer markets, with stronger growth potential, giving an appropriate premium. Give the company 30 times PE in 2024, corresponding to the target price of 54.28 yuan/share, the first coverage to give a "buy" rating.

Risk Warning: Volatility in global demand for transformers led to lower-than-expected orders, fluctuations in raw material prices and changes in order structure led to lower-than-expected gross profit margins for transformers, lower-than-expected demand in the energy storage industry, and lower-than-expected business development and delivery of digital factories.

(Source: Huibo Investment Research)

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(edited by Zeng Jianhui)