Suwen Electric Power is a one-stop (EPCO) power supply service provider, whose business covers power consultation and design, engineering construction, equipment supply and intelligent power service. The company focuses on the decentralized customer-side distribution network market, with a large number of customers, a small single order and a very scattered market. Different from the scale and qualification of large power engineering enterprises, customer service in the customer-side distribution network market is more critical. The three advantages of EPCO integration, service and brand are outstanding: 1) the integration of consulting design, engineering construction, equipment industry and intelligent power service has been realized, which better meets the diversified needs of customers; 2) Private market-oriented mechanism encourages employees to provide quality services to customers; 3) Take the lead in listing and establish the first-Mover advantage of "Suwen" brand.
Carbon neutrality stimulates further market expansion.
China's power grid engineering construction market is large, and rural power grid upgrading and distribution network construction are the focus of power grid investment. According to the data of China Electric Power Enterprise Federation, in 20 19, the investment in power grid construction nationwide was 485.6 billion yuan, of which 1 10 kV and below accounted for 63.3% of the power grid investment, reaching 307.4 billion yuan, up 5.9 percentage points over the previous year. Under the goal of "peak carbon dioxide emission and carbon neutrality", a large number of new energy sources such as distributed photovoltaic and wind power will be connected to the distribution network in the future, which poses new challenges to the intelligence and flexibility of the distribution network, and the market scale of distribution engineering is expected to be further expanded.
The owners of the company's services are mostly real estate and large industrial enterprises, among which there are many well-known enterprises with national layout. With the cooperation with these big customers in the past, the company gradually expanded from Changzhou to other provinces and cities in Jiangsu. In 2020, the company's income in the province accounts for 89. 14%, and the income outside the province accounts for 10.86%. By the end of 2020, the company's E-side, C-side and P-side services have covered 13 and 1655 respectively.
Intelligent power operation and maintenance injects long-term growth momentum
The company takes the client power distribution project as the breakthrough point, and relies on the self-made Suwen Electric Power Intelligent Power Operation and Maintenance Software and Hardware System to rapidly develop the intelligent power operation and maintenance business. According to the prospectus, as of August 3, 20201day, the company's Franklin power cloud platform has been connected to 12 16 industrial enterprises and other users. Due to the SaaS nature of smart power operation and maintenance, with the increase of the number of users, the profitability of this business will continue to strengthen and become the company's long-term growth point.
Capital proposal
The company is a whole industry chain service provider of power consulting design, construction, equipment supply and intelligent power operation and maintenance services, focusing on the customer power distribution market. Its service integration, market-oriented operation, service quality and brand advantages are obvious, and it has accumulated a large number of users of state grid and enterprises and institutions. The main business is growing rapidly, and the performance is growing rapidly. The net profit from 20 16 to 2020 is 62.49%. Based in Changzhou, the company lays out the national market, and has rich high-quality customer resources and remarkable order contracting advantages. It is expected to benefit from the increase of power construction investment scale and the release of smart electricity demand under the background of carbon neutrality and peak carbon dioxide emission. We are optimistic about the future growth space of the company. It is estimated that the company's operating income from 2002/kloc-0 to 2023 will be 18.96, 25. 19 and 323 1 100 million yuan respectively, with year-on-year growth of 38.5%, 32.8% and 28.2% respectively. The net profit was 333.439 billion yuan and 567 million yuan respectively, a year-on-year increase.
40.0%, 32.0% and 29.2%, EPS is 2.37, 3. 13 and 4.04 yuan respectively, and PE is 2 1.3, 16. 1 and12 respectively. Covering the investment rating of Buy -A for the first time, the 6-month target price is 6 1.0 yuan.
Risk warning: the policy strength is not as good as expected, and the risk is relatively concentrated in the company's business field, the risk of safety and quality control, and the risk of intensified market competition.